Forestar Group (NYSE:FOR) vs. United Homes Group (NASDAQ:UHG) Financial Review

United Homes Group (NASDAQ:UHG) and Forestar Group (NYSE:FOR) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Analyst Ratings

This is a breakdown of current ratings for United Homes Group and Forestar Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Homes Group	1	0	0	0	1.00
Forestar Group	0	3	4	0	2.57

Forestar Group has a consensus price target of $32.00, indicating a potential upside of 16.75%. Given Forestar Group’s stronger consensus rating and higher probable upside, analysts clearly believe Forestar Group is more favorable than United Homes Group.

Institutional & Insider Ownership

88.9% of United Homes Group shares are owned by institutional investors. Comparatively, 35.5% of Forestar Group shares are owned by institutional investors. 72.3% of United Homes Group shares are owned by insiders. Comparatively, 0.5% of Forestar Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

United Homes Group has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Forestar Group has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500.

Earnings & Valuation

This table compares United Homes Group and Forestar Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Homes Group	$463.71 million	0.20	$46.91 million	($0.32)	-4.94
Forestar Group	$1.66 billion	0.84	$167.90 million	$3.29	8.33

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.

Profitability

This table compares United Homes Group and Forestar Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Homes Group	-4.49%	-37.81%	-9.88%
Forestar Group	10.11%	10.08%	5.52%

Summary

Forestar Group beats United Homes Group on 12 of the 14 factors compared between the two stocks.

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.

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.