Contrasting Taylor Morrison Home (NYSE:TMHC) and Lennar (NYSE:LEN.B)

Taylor Morrison Home (NYSE:TMHC) and Lennar (NYSE:LEN.B) are both construction companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitability, risk and earnings.

Earnings & Valuation

This table compares Taylor Morrison Home and Lennar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taylor Morrison Home	$8.17 billion	0.76	$883.31 million	$8.66	7.12
Lennar	$35.44 billion	0.82	$3.93 billion	$12.09	9.48

Lennar has higher revenue and earnings than Taylor Morrison Home. Taylor Morrison Home is trading at a lower price-to-earnings ratio than Lennar, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Taylor Morrison Home and Lennar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taylor Morrison Home	0	0	9	1	3.10
Lennar	0	0	0	0	0.00

Taylor Morrison Home presently has a consensus target price of $77.13, suggesting a potential upside of 25.04%. Given Taylor Morrison Home’s stronger consensus rating and higher possible upside, research analysts clearly believe Taylor Morrison Home is more favorable than Lennar.

Insider and Institutional Ownership

95.2% of Taylor Morrison Home shares are held by institutional investors. Comparatively, 3.3% of Lennar shares are held by institutional investors. 1.4% of Taylor Morrison Home shares are held by company insiders. Comparatively, 15.0% of Lennar shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Taylor Morrison Home has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Lennar has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Profitability

This table compares Taylor Morrison Home and Lennar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taylor Morrison Home	10.72%	16.22%	10.23%
Lennar	7.72%	11.09%	7.34%

Summary

Taylor Morrison Home beats Lennar on 9 of the 15 factors compared between the two stocks.

About Taylor Morrison Home

Taylor Morrison Home Corporation, together with its subsidiaries, operates as a public homebuilder in the United States. The company designs, builds, and sells single and multi-family detached and attached homes; and develops lifestyle and master-planned communities. It develops and constructs multi-use properties consisting of commercial space, retail, and multi-family properties under the Urban Form brand name. In addition, the company offers financial services, title insurance, and closing settlement services. It operates under the Taylor Morrison, Darling Homes Collection by Taylor Morrison, and Esplanade brand names in Arizona, California, Colorado, Florida, Georgia, Nevada, North and South Carolina, Oregon, Texas, and Washington. Taylor Morrison Home Corporation was founded in 1936 and is headquartered in Scottsdale, Arizona.

About Lennar

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. It primarily sells single-family attached and detached homes in communities targeted to first-time, move-up, active adult, and luxury homebuyers. The company also offers residential mortgage financing, title insurance, and closing services for home buyers and others. In addition, it involves in the fund investment activity; and originates and sells into securitizations commercial mortgage loans. Further, the company develops, constructs, and manages multifamily rental properties. Lennar Corporation was founded in 1954 and is based in Miami, Florida.