Beazer Homes USA (NYSE: BZH) and M.D.C. (NYSE:MDC) are both small-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, dividends, risk, earnings and valuation.
This table compares Beazer Homes USA and M.D.C.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Beazer Homes USA||-3.97%||9.71%||2.76%|
M.D.C. pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. Beazer Homes USA does not pay a dividend. M.D.C. pays out 46.5% of its earnings in the form of a dividend. M.D.C. has increased its dividend for 6 consecutive years.
Risk & Volatility
Beazer Homes USA has a beta of 2.43, suggesting that its share price is 143% more volatile than the S&P 500. Comparatively, M.D.C. has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Beazer Homes USA and M.D.C., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Beazer Homes USA||0||2||2||0||2.50|
Beazer Homes USA presently has a consensus target price of $19.67, suggesting a potential upside of 31.64%. M.D.C. has a consensus target price of $33.57, suggesting a potential upside of 8.82%. Given Beazer Homes USA’s stronger consensus rating and higher possible upside, research analysts clearly believe Beazer Homes USA is more favorable than M.D.C..
Institutional & Insider Ownership
82.6% of Beazer Homes USA shares are owned by institutional investors. Comparatively, 79.7% of M.D.C. shares are owned by institutional investors. 7.3% of Beazer Homes USA shares are owned by insiders. Comparatively, 27.0% of M.D.C. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Beazer Homes USA and M.D.C.’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Beazer Homes USA||$1.92 billion||0.26||$31.81 million||$1.54||9.70|
|M.D.C.||$2.58 billion||0.67||$141.83 million||$2.58||11.96|
M.D.C. has higher revenue and earnings than Beazer Homes USA. Beazer Homes USA is trading at a lower price-to-earnings ratio than M.D.C., indicating that it is currently the more affordable of the two stocks.
M.D.C. beats Beazer Homes USA on 12 of the 17 factors compared between the two stocks.
About Beazer Homes USA
Beazer Homes USA, Inc. operates as a homebuilder in the United States. The company designs, constructs, and sells single-family and multi-family homes for entry-level, move-up, or retirement-oriented home buyers under the Beazer Homes brand name. It sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Delaware, Indiana, Maryland, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina. Beazer Homes USA, Inc. was founded in 1985 and is headquartered in Atlanta, Georgia.
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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