Critical Review: Legacy Housing (NASDAQ:LEGH) versus Deer Valley (NASDAQ:DVLY)

Deer Valley (OTCMKTS:DVLY) and Legacy Housing (NASDAQ:LEGH) are both construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Profitability

This table compares Deer Valley and Legacy Housing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deer Valley N/A N/A N/A
Legacy Housing 15.45% 12.12% 9.98%

Earnings & Valuation

This table compares Deer Valley and Legacy Housing’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Deer Valley N/A N/A N/A N/A N/A
Legacy Housing $161.88 million 2.44 $21.51 million $1.07 14.94

Legacy Housing has higher revenue and earnings than Deer Valley.

Analyst Ratings

This is a summary of current recommendations and price targets for Deer Valley and Legacy Housing, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deer Valley 0 0 0 0 N/A
Legacy Housing 0 0 3 0 3.00

Legacy Housing has a consensus target price of $18.00, suggesting a potential upside of 12.57%. Given Legacy Housing’s higher probable upside, analysts plainly believe Legacy Housing is more favorable than Deer Valley.

Institutional and Insider Ownership

16.7% of Legacy Housing shares are owned by institutional investors. 81.6% of Deer Valley shares are owned by insiders. Comparatively, 49.1% of Legacy Housing shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Legacy Housing beats Deer Valley on 7 of the 8 factors compared between the two stocks.

Deer Valley Company Profile

Deer Valley Corp. engages in designs, manufactures, and finances factory built homes. It specializes in developing of homes and markets through a network of independent dealers, builders, developers, and government agencies. The company was founded on November 1, 1999 and is headquartered in Guin, AL.

Legacy Housing Company Profile

Legacy Housing Corporation builds, sells, and finances manufactured homes and tiny houses primarily in the southern United States. The company manufactures and provides for the transport of mobile homes; and offers wholesale financing to dealers and mobile home parks, as well as a range of homes, including 1 to 5 bedrooms, with 1 to 3 1/2 bathrooms. It also provides floor plan or wholesale financing for independent retailers; consumer financing for its products sold to end-users; and financing to community owners that buy its products for use in their rental housing communities. The company markets its homes under the Legacy brand through a network of 114 independent and 12 company-owned retail locations, as well as direct sales to owners of manufactured home communities in 15 states in the United States. Legacy Housing Corporation was founded in 2005 and is headquartered in Bedford, Texas.

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