Forestar Group (NYSE:FOR – Get Free Report) and United Homes Group (NASDAQ:UHG – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.
Volatility and Risk
Forestar Group has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500. Comparatively, United Homes Group has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.
Insider and Institutional Ownership
35.5% of Forestar Group shares are owned by institutional investors. Comparatively, 88.9% of United Homes Group shares are owned by institutional investors. 0.4% of Forestar Group shares are owned by insiders. Comparatively, 85.3% of United Homes Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Forestar Group | $1.66 billion | 0.82 | $167.90 million | $3.29 | 8.18 |
| United Homes Group | $463.71 million | 0.17 | $46.91 million | ($0.32) | -4.19 |
Forestar Group has higher revenue and earnings than United Homes Group. United Homes Group is trading at a lower price-to-earnings ratio than Forestar Group, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Forestar Group and United Homes Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Forestar Group | 0 | 3 | 4 | 0 | 2.57 |
| United Homes Group | 1 | 0 | 0 | 0 | 1.00 |
Forestar Group currently has a consensus target price of $32.00, suggesting a potential upside of 18.96%. Given Forestar Group’s stronger consensus rating and higher probable upside, analysts plainly believe Forestar Group is more favorable than United Homes Group.
Profitability
This table compares Forestar Group and United Homes Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Forestar Group | 10.11% | 10.08% | 5.52% |
| United Homes Group | -4.49% | -37.81% | -9.88% |
Summary
Forestar Group beats United Homes Group on 12 of the 14 factors compared between the two stocks.
About Forestar Group
Forestar Group Inc. operates as a residential lot development company in the United States. The company acquires land and develops infrastructure for single-family residential communities. It sells its residential single-family finished lots to local, regional, and national homebuilders. The company was incorporated in 2005 and is headquartered in Arlington, Texas. Forestar Group Inc. operates as a subsidiary of D.R. Horton, Inc.
About United Homes Group
United Homes Group, Inc., a homebuilding company, engages in the design, building, and sale of homes in South Carolina, North Carolina, and Georgia. It provides detached single-family houses, as well as attached single-family houses, including duplex and town houses for entry-level buyers, first time move-ups, second time move-ups, third time move-ups, and custom builds. The company was founded in 2004 and is headquartered in Chapin, South Carolina.
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