Analyzing MDC (MDC) & Its Peers

MDC (NYSE: MDC) is one of 20 publicly-traded companies in the “Operative builders” industry, but how does it compare to its peers? We will compare MDC to similar companies based on the strength of its analyst recommendations, dividends, profitability, risk, institutional ownership, earnings and valuation.

Profitability

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This table compares MDC and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MDC 5.50% 11.00% 5.82%
MDC Competitors 2.30% 7.26% 5.34%

Volatility & Risk

MDC has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, MDC’s peers have a beta of 1.10, indicating that their average stock price is 10% more volatile than the S&P 500.

Dividends

MDC pays an annual dividend of $1.20 per share and has a dividend yield of 4.2%. MDC pays out 46.5% of its earnings in the form of a dividend. As a group, “Operative builders” companies pay a dividend yield of 1.5% and pay out 20.8% of their earnings in the form of a dividend. MDC has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for MDC and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MDC 1 5 2 0 2.13
MDC Competitors 241 922 805 52 2.33

MDC currently has a consensus price target of $32.57, indicating a potential upside of 13.93%. As a group, “Operative builders” companies have a potential downside of 0.56%. Given MDC’s higher probable upside, equities analysts clearly believe MDC is more favorable than its peers.

Earnings & Valuation

This table compares MDC and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
MDC $2.58 billion $141.83 million 11.08
MDC Competitors $4.18 billion $223.65 million 13.58

MDC’s peers have higher revenue and earnings than MDC. MDC is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

98.8% of MDC shares are owned by institutional investors. Comparatively, 78.0% of shares of all “Operative builders” companies are owned by institutional investors. 27.0% of MDC shares are owned by company insiders. Comparatively, 15.4% of shares of all “Operative builders” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

MDC beats its peers on 8 of the 15 factors compared.

About MDC

M.D.C. Holdings, Inc., through its subsidiaries, engages in the homebuilding and financial service businesses. Its homebuilding operations include purchasing finished lots or developing lots for the construction and sale primarily of single-family detached homes to first-time and first-time move-up homebuyers under the Richmond American Homes name. The company conducts its homebuilding operations in Arizona, California, Nevada, Washington, Colorado, Utah, Virginia, Florida, Maryland, Pennsylvania, and New Jersey. Its financial services operations consist of originating mortgage loans primarily for homebuyers; providing insurance coverage primarily to its homebuilding subsidiaries and subcontractors for homes sold by its homebuilding subsidiaries, and for work performed in completed subdivisions; acting as a re-insurer on the claims; selling third-party personal property and casualty insurance products to homebuyers; and offering title agency services to homebuilding subsidiaries and customers in Colorado, Florida, Maryland, Nevada, and Virginia. M.D.C. Holdings, Inc. was founded in 1972 and is based in Denver, Colorado.

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