Critical Contrast: KB Home (KBH) versus Its Peers

KB Home (NYSE: KBH) is one of 24 publicly-traded companies in the “Homebuilding” industry, but how does it compare to its rivals? We will compare KB Home to similar businesses based on the strength of its earnings, risk, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Insider & Institutional Ownership

89.1% of KB Home shares are owned by institutional investors. Comparatively, 78.0% of shares of all “Homebuilding” companies are owned by institutional investors. 8.6% of KB Home shares are owned by insiders. Comparatively, 13.1% of shares of all “Homebuilding” companies are owned by 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.

Earnings & Valuation

This table compares KB Home and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
KB Home $3.59 billion $105.61 million 20.94
KB Home Competitors $3.83 billion $231.12 million 5,467.40

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

Dividends

KB Home pays an annual dividend of $0.10 per share and has a dividend yield of 0.3%. KB Home pays out 7.2% of its earnings in the form of a dividend. As a group, “Homebuilding” companies pay a dividend yield of 0.7% and pay out 13.4% of their earnings in the form of a dividend.

Risk & Volatility

KB Home has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500. Comparatively, KB Home’s rivals have a beta of 1.52, meaning that their average stock price is 52% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for KB Home and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KB Home 4 12 0 0 1.75
KB Home Competitors 282 1674 1917 38 2.44

KB Home currently has a consensus target price of $21.93, suggesting a potential downside of 24.64%. As a group, “Homebuilding” companies have a potential downside of 74.50%. Given KB Home’s higher probable upside, equities research analysts plainly believe KB Home is more favorable than its rivals.

Profitability

This table compares KB Home and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KB Home 3.22% 7.57% 2.66%
KB Home Competitors 9.74% 14.79% 7.94%

Summary

KB Home rivals beat KB Home on 11 of the 15 factors compared.

About KB Home

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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