Critical Contrast: Beazer Homes USA (NYSE:BZH) & Persimmon (OTCMKTS:PSMMY)

Persimmon (OTCMKTS:PSMMY) and Beazer Homes USA (NYSE:BZH) are both construction companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Volatility and Risk

Persimmon has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Beazer Homes USA has a beta of 2.21, meaning that its stock price is 121% more volatile than the S&P 500.

Profitability

This table compares Persimmon and Beazer Homes USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Persimmon	N/A	N/A	N/A
Beazer Homes USA	0.44%	2.11%	0.97%

Valuation and Earnings

This table compares Persimmon and Beazer Homes USA”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Persimmon	$4.95 billion	1.01	$376.70 million	N/A	N/A
Beazer Homes USA	$2.27 billion	0.28	$45.59 million	$0.30	72.72

Persimmon has higher revenue and earnings than Beazer Homes USA.

Insider & Institutional Ownership

85.7% of Beazer Homes USA shares are owned by institutional investors. 0.6% of Persimmon shares are owned by insiders. Comparatively, 8.0% of Beazer Homes USA 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.

Analyst Recommendations

This is a summary of current ratings for Persimmon and Beazer Homes USA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Persimmon	0	0	4	1	3.20
Beazer Homes USA	1	2	2	0	2.20

Beazer Homes USA has a consensus target price of $31.33, indicating a potential upside of 43.62%. Given Beazer Homes USA’s higher possible upside, analysts plainly believe Beazer Homes USA is more favorable than Persimmon.

Summary

Beazer Homes USA beats Persimmon on 7 of the 13 factors compared between the two stocks.

About Persimmon

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services under the FibreNest brand; and timber frame, insulated wall panels, and roof cassettes under the brand Space4. Further, it offers concrete bricks and roof tile. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.

About Beazer Homes USA

Beazer Homes USA, Inc. operates as a homebuilder in the United States. It designs, constructs, and sells single-family and multi-family homes under the Beazer Homes, Gatherings, and Choice Plans names. The company also sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Indiana, Delaware, Maryland, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina. Beazer Homes USA, Inc. was founded in 1985 and is headquartered in Atlanta, Georgia.