Head to Head Analysis: Sekisui House (OTCMKTS:SKHSY) vs. Hovnanian Enterprises (NYSE:HOV)

Hovnanian Enterprises (NYSE:HOV) and Sekisui House (OTCMKTS:SKHSY) are both construction companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, dividends, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings for Hovnanian Enterprises and Sekisui House, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hovnanian Enterprises	0	3	0	0	2.00
Sekisui House	0	1	0	0	2.00

Hovnanian Enterprises presently has a consensus price target of $120.00, suggesting a potential downside of 4.82%. Given Hovnanian Enterprises’ higher possible upside, equities analysts clearly believe Hovnanian Enterprises is more favorable than Sekisui House.

Profitability

This table compares Hovnanian Enterprises and Sekisui House’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hovnanian Enterprises	1.92%	14.18%	3.78%
Sekisui House	4.85%	10.08%	4.17%

Institutional & Insider Ownership

65.4% of Hovnanian Enterprises shares are owned by institutional investors. Comparatively, 0.0% of Sekisui House shares are owned by institutional investors. 22.7% of Hovnanian Enterprises 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.

Earnings and Valuation

This table compares Hovnanian Enterprises and Sekisui House”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hovnanian Enterprises	$2.98 billion	0.25	$63.87 million	$6.53	19.31
Sekisui House	$26.67 billion	0.60	$1.44 billion	$2.07	11.85

Sekisui House has higher revenue and earnings than Hovnanian Enterprises. Sekisui House is trading at a lower price-to-earnings ratio than Hovnanian Enterprises, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Hovnanian Enterprises has a beta of 2.31, indicating that its share price is 131% more volatile than the S&P 500. Comparatively, Sekisui House has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Summary

Hovnanian Enterprises beats Sekisui House on 7 of the 12 factors compared between the two stocks.

About Hovnanian Enterprises

Hovnanian Enterprises, Inc., through its subsidiaries, designs, constructs, markets, and sells residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans, title insurance, and homeowner’s insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.

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.