Taylor Morrison Home Corp (TMHC) & KB Home (KBH) Critical Comparison

Taylor Morrison Home Corp (NASDAQ: TMHC) and KB Home (NYSE:KBH) are both mid-cap homebuilding – nec companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for Taylor Morrison Home Corp and KB Home, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taylor Morrison Home Corp 0 4 1 0 2.20
KB Home 4 12 0 0 1.75

Taylor Morrison Home Corp currently has a consensus price target of $23.25, indicating a potential upside of 1.17%. KB Home has a consensus price target of $21.50, indicating a potential downside of 23.51%. Given Taylor Morrison Home Corp’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Taylor Morrison Home Corp is more favorable than KB Home.

Dividends

KB Home pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Taylor Morrison Home Corp does not pay a dividend. KB Home pays out 7.2% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Taylor Morrison Home Corp and KB Home’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Taylor Morrison Home Corp N/A N/A N/A $0.62 37.06
KB Home $3.59 billion 0.68 $105.61 million $1.39 20.22

KB Home has higher revenue and earnings than Taylor Morrison Home Corp. KB Home is trading at a lower price-to-earnings ratio than Taylor Morrison Home Corp, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Taylor Morrison Home Corp has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500. Comparatively, KB Home has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500.

Insider & Institutional Ownership

97.6% of KB Home shares are held by institutional investors. 8.6% of KB Home shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Taylor Morrison Home Corp and KB Home’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Taylor Morrison Home Corp 6.16% 9.57% 5.34%
KB Home 3.22% 7.57% 2.66%

Summary

Taylor Morrison Home Corp beats KB Home on 7 of the 13 factors compared between the two stocks.

Taylor Morrison Home Corp Company Profile

Taylor Morrison Home Corporation is a homebuilder, which designs, builds and sells single-family detached and attached homes. The Company is also a land developer, with a portfolio of lifestyle and master-planned communities. Its segments include East, which includes Atlanta, Charlotte, North Florida, Raleigh, Southwest Florida and Tampa; Central, which includes Austin, Dallas, and Houston (each of the Dallas and Houston markets include both a Taylor Morrison division and a Darling Homes division); West, which includes Bay Area, Chicago, Denver, Phoenix, Sacramento and Southern California, and Mortgage Operations, which includes Taylor Morrison Home Funding, LLC (TMHF) and Inspired Title Services, LLC (Inspired Title). It operates under the Taylor Morrison and Darling Homes brand names. The Company also provides financial services to customers through its mortgage subsidiary, TMHF, and title insurance and closing settlement services through its title company, Inspired Title.

KB Home Company Profile

KB HOME is a homebuilding company. The Company is engaged in selling and building a range of new homes designed primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family residential homes. It operates through five segments, which consist of four homebuilding segments and one financial services segment. Its homebuilding segments include West Coast, Southwest, Central and Southeast. The homebuilding segments are engaged in the acquisition and development of land primarily for residential purposes. The financial services segment offers property and casualty insurance and, in certain instances, earthquake, flood and personal property insurance to its homebuyers in the same markets as its homebuilding segments, and provides title services in the majority of markets located within its Central and Southeast homebuilding segments. It offers homes in development communities, at urban in-fill locations and as part of mixed-use projects.

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