Analyzing Star (NASDAQ:STHO) & Legacy Housing (NASDAQ:LEGH)

Legacy Housing (NASDAQ:LEGH) and Star (NASDAQ:STHO) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Volatility and Risk

Legacy Housing has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, Star has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Profitability

This table compares Legacy Housing and Star’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Legacy Housing	25.41%	8.09%	7.48%
Star	-58.33%	0.14%	0.07%

Insider & Institutional Ownership

89.3% of Legacy Housing shares are held by institutional investors. Comparatively, 89.3% of Star shares are held by institutional investors. 30.1% of Legacy Housing shares are held by company insiders. Comparatively, 3.7% of Star shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Legacy Housing and Star”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Legacy Housing	$164.57 million	2.79	$41.81 million	$1.73	11.15
Star	$110.14 million	0.87	-$64.25 million	($4.89)	-1.63

Legacy Housing has higher revenue and earnings than Star. Star is trading at a lower price-to-earnings ratio than Legacy Housing, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Legacy Housing and Star, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Legacy Housing	0	4	0	0	2.00
Star	1	0	0	0	1.00

Legacy Housing presently has a consensus price target of $21.00, indicating a potential upside of 8.86%. Given Legacy Housing’s stronger consensus rating and higher probable upside, equities analysts plainly believe Legacy Housing is more favorable than Star.

Summary

Legacy Housing beats Star on 12 of the 13 factors compared between the two stocks.

About Legacy Housing

Legacy Housing Corporation engages in the building, sale, and financing of manufactured homes and tiny houses primarily in the southern United States. It manufactures and provides for the transport of mobile homes, including 1 to 5 bedrooms with 1 to 3 1/2 bathrooms; and provides wholesale financing to dealers and mobile home parks, as well as retail financing to consumers. The company also offers inventory financing for its independent retailers; consumer financing for its products; and financing to manufactured housing community owners that buy or lease its products for use in their rental housing communities. In addition, it involved in financing and developing new manufactured home communities. The company markets its homes under the Legacy brand through a network of independent retailers and company-owned stores; and directly to manufactured home communities. Legacy Housing Corporation was founded in 2005 and is headquartered in Bedford, Texas.

About Star

Star Holdings engages in the non-ground lease related commercial real estate businesses in the United States. Its portfolio primarily comprises interest in the Asbury Park Waterfront and Magnolia Green residential development projects. Star Holdings is based in New York, New York.