Lennar (NYSE:LEN) vs. Taylor Morrison Home (NYSE:TMHC) Financial Review

Lennar (NYSE:LEN) and Taylor Morrison Home (NYSE:TMHC) are both construction companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

81.1% of Lennar shares are held by institutional investors. Comparatively, 95.2% of Taylor Morrison Home shares are held by institutional investors. 10.0% of Lennar shares are held by insiders. Comparatively, 1.4% of Taylor Morrison Home shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Lennar and Taylor Morrison Home”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennar	$35.44 billion	0.88	$3.93 billion	$12.09	10.00
Taylor Morrison Home	$8.17 billion	0.80	$883.31 million	$8.66	7.49

Lennar has higher revenue and earnings than Taylor Morrison Home. Taylor Morrison Home is trading at a lower price-to-earnings ratio than Lennar, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Lennar has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Taylor Morrison Home has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Lennar and Taylor Morrison Home, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	0	14	2	1	2.24
Taylor Morrison Home	0	0	9	1	3.10

Lennar currently has a consensus target price of $128.8462, suggesting a potential upside of 6.56%. Taylor Morrison Home has a consensus target price of $76.8750, suggesting a potential upside of 18.49%. Given Taylor Morrison Home’s stronger consensus rating and higher possible upside, analysts clearly believe Taylor Morrison Home is more favorable than Lennar.

Profitability

This table compares Lennar and Taylor Morrison Home’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	9.20%	12.73%	8.57%
Taylor Morrison Home	10.72%	16.22%	10.23%

Summary

Taylor Morrison Home beats Lennar on 8 of the 14 factors compared between the two stocks.

About Lennar

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company’s homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land; and development, construction, and management of multifamily rental properties. It also offers residential mortgage financing, title, insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans. In addition, the company is involved in the fund investment activity. It primarily serves first-time, move-up, active adult, and luxury homebuyers. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

About Taylor Morrison Home

Taylor Morrison Home Corporation, together with its subsidiaries, operates as a public homebuilder in the United States. The company designs, builds, and sells single and multi-family detached and attached homes; and develops lifestyle and master-planned communities. It develops and constructs multi-use properties consisting of commercial space, retail, and multi-family properties under the Urban Form brand name. In addition, the company offers financial services, title insurance, and closing settlement services. It operates under the Taylor Morrison, Darling Homes Collection by Taylor Morrison, and Esplanade brand names in Arizona, California, Colorado, Florida, Georgia, Nevada, North and South Carolina, Oregon, Texas, and Washington. Taylor Morrison Home Corporation was founded in 1936 and is headquartered in Scottsdale, Arizona.