Lennar (LEN) versus Its Peers Financial Analysis

Lennar (NYSE:LEN) is one of 23 public companies in the “BLDG – RSDNT/COMR” industry, but how does it contrast to its competitors? We will compare Lennar to similar businesses based on the strength of its profitability, institutional ownership, valuation, dividends, analyst recommendations, risk and earnings.

Risk & Volatility

Lennar has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Lennar’s competitors have a beta of 0.96, meaning that their average share price is 4% less volatile than the S&P 500.

Dividends

Lennar pays an annual dividend of $2.00 per share and has a dividend yield of 1.8%. Lennar pays out 16.5% of its earnings in the form of a dividend. As a group, “BLDG – RSDNT/COMR” companies pay a dividend yield of 1.6% and pay out 12.6% of their earnings in the form of a dividend. Lennar has raised its dividend for 1 consecutive years.

Earnings and Valuation

This table compares Lennar and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Lennar	$35.44 billion	$3.93 billion	9.12
Lennar Competitors	$11.16 billion	$1.27 billion	5.17

Lennar has higher revenue and earnings than its competitors. Lennar is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Lennar and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	0	15	3	1	2.26
Lennar Competitors	374	1817	2056	65	2.42

Lennar presently has a consensus target price of $132.50, suggesting a potential upside of 20.23%. As a group, “BLDG – RSDNT/COMR” companies have a potential upside of 24.86%. Given Lennar’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Lennar has less favorable growth aspects than its competitors.

Profitability

This table compares Lennar and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	9.20%	12.73%	8.57%
Lennar Competitors	11.46%	18.14%	11.02%

Institutional and Insider Ownership

81.1% of Lennar shares are owned by institutional investors. Comparatively, 78.6% of shares of all “BLDG – RSDNT/COMR” companies are owned by institutional investors. 10.0% of Lennar shares are owned by insiders. Comparatively, 8.3% of shares of all “BLDG – RSDNT/COMR” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Lennar beats its competitors on 8 of the 15 factors compared.

Lennar Company Profile

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company’s homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land; and development, construction, and management of multifamily rental properties. It also offers residential mortgage financing, title, insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans. In addition, the company is involved in the fund investment activity. It primarily serves first-time, move-up, active adult, and luxury homebuyers. Lennar Corporation was founded in 1954 and is based in Miami, Florida.