Analyzing Toll Brothers (NYSE:TOL) & Persimmon (OTCMKTS:PSMMY)

Toll Brothers (NYSE:TOL) and Persimmon (OTCMKTS:PSMMY) are both construction companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Valuation & Earnings

This table compares Toll Brothers and Persimmon”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toll Brothers	$10.97 billion	1.22	$1.57 billion	$13.56	10.26
Persimmon	$4.09 billion	1.38	$341.33 million	N/A	N/A

Toll Brothers has higher revenue and earnings than Persimmon.

Dividends

Toll Brothers pays an annual dividend of $1.00 per share and has a dividend yield of 0.7%. Persimmon pays an annual dividend of $0.91 per share and has a dividend yield of 2.6%. Toll Brothers pays out 7.4% of its earnings in the form of a dividend. Toll Brothers has raised its dividend for 5 consecutive years.

Profitability

This table compares Toll Brothers and Persimmon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toll Brothers	12.28%	16.74%	9.49%
Persimmon	N/A	N/A	N/A

Institutional and Insider Ownership

91.8% of Toll Brothers shares are owned by institutional investors. 1.5% of Toll Brothers shares are owned by company insiders. Comparatively, 0.6% of Persimmon shares are owned by company 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.

Analyst Ratings

This is a summary of recent ratings for Toll Brothers and Persimmon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toll Brothers	2	6	8	2	2.56
Persimmon	0	0	4	1	3.20

Toll Brothers currently has a consensus target price of $150.36, suggesting a potential upside of 8.07%. Given Toll Brothers’ higher possible upside, analysts plainly believe Toll Brothers is more favorable than Persimmon.

Risk and Volatility

Toll Brothers has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Persimmon has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Summary

Toll Brothers beats Persimmon on 12 of the 16 factors compared between the two stocks.

About Toll Brothers

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. It designs, builds, markets, and sells condominiums through Toll Brothers City Living. The company also develops a range of single-story living and first-floor primary bedroom suite home designs, as well as communities with recreational amenities, such as golf courses, marinas, pool complexes, country clubs, and fitness and recreation centers; and develops, operates, and rents apartments. In addition, it provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, the company owns and operates architectural, engineering, mortgage, title, land development, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and component manufacturing operations. It serves luxury first-time, move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Fort Washington, Pennsylvania.

About Persimmon

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services under the FibreNest brand; and timber frame, insulated wall panels, and roof cassettes under the brand Space4. Further, it offers concrete bricks and roof tile. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.