Sekisui House (OTCMKTS:SKHSY – Get Free Report) and KB Home (NYSE:KBH – Get Free Report) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.
Profitability
This table compares Sekisui House and KB Home’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sekisui House | 4.78% | 9.88% | 4.10% |
| KB Home | 8.47% | 14.02% | 8.14% |
Analyst Ratings
This is a summary of recent ratings for Sekisui House and KB Home, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sekisui House | 0 | 1 | 0 | 0 | 2.00 |
| KB Home | 1 | 7 | 3 | 1 | 2.33 |
Insider & Institutional Ownership
0.0% of Sekisui House shares are held by institutional investors. Comparatively, 96.1% of KB Home shares are held by institutional investors. 3.9% of KB Home shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Sekisui House and KB Home”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sekisui House | $26.67 billion | 0.58 | $1.44 billion | $2.03 | 11.47 |
| KB Home | $6.93 billion | 0.62 | $655.02 million | $7.55 | 8.33 |
Sekisui House has higher revenue and earnings than KB Home. KB Home is trading at a lower price-to-earnings ratio than Sekisui House, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Sekisui House has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, KB Home has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.
Dividends
Sekisui House pays an annual dividend of $0.88 per share and has a dividend yield of 3.8%. KB Home pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. Sekisui House pays out 43.3% of its earnings in the form of a dividend. KB Home pays out 13.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. KB Home has raised its dividend for 2 consecutive years.
Summary
KB Home beats Sekisui House on 14 of the 18 factors compared between the two stocks.
About Sekisui House
Sekisui House, Ltd. designs, constructs, and contracts built-to-order detached houses in Japan and internationally. The company operates through Custom Detached Houses, Rental Housing, Architectural/Civil Engineering, Remodeling, Real Estate Management Fees, Houses For Sale, Condominiums, Urban Redevelopment, and Overseas segments. It also engages in contracting of design and construction of custom detached houses, rental housing, office building, commercial buildings, and other properties; construction of reinforced concrete rental housing and commercial buildings; contracting of design and construction of civil engineering works; remodeling and renovation of houses; subleasing, management, operation, and brokerage of real estate; sale of houses and residential land; and sales of condominiums. Sekisui House, Ltd. was incorporated in 1929 and is headquartered in Osaka, Japan.
About KB Home
KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.
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