New Home Company Inc. (The) (NYSE: NWHM) and PulteGroup (NYSE:PHM) are both construction companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.
PulteGroup pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. New Home Company Inc. (The) does not pay a dividend. PulteGroup pays out 20.0% of its earnings in the form of a dividend. PulteGroup has increased its dividend for 3 consecutive years.
Volatility & Risk
New Home Company Inc. (The) has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, PulteGroup has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.
Institutional & Insider Ownership
57.2% of New Home Company Inc. (The) shares are owned by institutional investors. Comparatively, 85.8% of PulteGroup shares are owned by institutional investors. 24.2% of New Home Company Inc. (The) shares are owned by insiders. Comparatively, 0.7% of PulteGroup shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current ratings for New Home Company Inc. (The) and PulteGroup, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New Home Company Inc. (The)||0||0||0||0||N/A|
PulteGroup has a consensus price target of $24.70, indicating a potential downside of 6.05%. Given PulteGroup’s higher probable upside, analysts plainly believe PulteGroup is more favorable than New Home Company Inc. (The).
Earnings and Valuation
This table compares New Home Company Inc. (The) and PulteGroup’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|New Home Company Inc. (The)||$269.13 million||0.78||$4.93 million||$1.04||9.62|
|PulteGroup||$8.09 billion||0.98||$1.11 billion||$1.80||14.61|
PulteGroup has higher revenue and earnings than New Home Company Inc. (The). New Home Company Inc. (The) is trading at a lower price-to-earnings ratio than PulteGroup, indicating that it is currently the more affordable of the two stocks.
This table compares New Home Company Inc. (The) and PulteGroup’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New Home Company Inc. (The)||2.82%||10.25%||4.74%|
PulteGroup beats New Home Company Inc. (The) on 13 of the 16 factors compared between the two stocks.
About New Home Company Inc. (The)
The New Home Company Inc. is a homebuilding company. The Company focuses on the design, construction and sale of consumer-driven homes in various metropolitan areas within certain markets in California and Arizona, including coastal Southern California, the San Francisco Bay area, metro Sacramento and the greater Phoenix area. The Company’s segments include homebuilding and fee building. The homebuilding operations consist of divisions in Northern California, Southern California and its division in Arizona, which is established through the purchase of lots in an unconsolidated joint venture. The Company is focused on building and selling homes for its own account. It is focused on identifying sites and creating communities that allow it to design, construct and sell consumer-driven single-family detached and attached homes in major metropolitan areas in coastal Southern California, the San Francisco Bay area, metro Sacramento and the greater Phoenix area.
PulteGroup, Inc. is a homebuilder in the United States. The Company’s segments include Homebuilding and Financial Services. Its Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the United States and the construction of housing on such land. Its Financial Services operations consist principally of mortgage banking and title operations. The Company conducts its financial services business, through Pulte Mortgage LLC (Pulte Mortgage) and other subsidiaries. Pulte Mortgage arranges financing through the origination of mortgage loans. The Company’s subsidiaries are engaged in the homebuilding business. It offers a product line to meet the needs of homebuyers in its focused markets. Through its brands, which include Centex, Pulte Homes, Del Webb, DiVosta Homes, and John Wieland Homes and Neighborhoods, the Company offers a range of home designs, including single-family detached, townhouses, condominiums and duplexes.
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