Critical Comparison: LGI Homes (NASDAQ:LGIH) and Lifetime Brands (NASDAQ:LCUT)

LGI Homes (NASDAQ:LGIH) and Lifetime Brands (NASDAQ:LCUT) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Valuation & Earnings

This table compares LGI Homes and Lifetime Brands”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LGI Homes	$1.71 billion	0.76	$72.55 million	$3.05	18.39
Lifetime Brands	$647.93 million	0.30	-$26.94 million	($1.27)	-6.78

LGI Homes has higher revenue and earnings than Lifetime Brands. Lifetime Brands is trading at a lower price-to-earnings ratio than LGI Homes, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

84.9% of LGI Homes shares are owned by institutional investors. Comparatively, 40.6% of Lifetime Brands shares are owned by institutional investors. 12.6% of LGI Homes shares are owned by insiders. Comparatively, 44.4% of Lifetime Brands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

LGI Homes has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500. Comparatively, Lifetime Brands has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Profitability

This table compares LGI Homes and Lifetime Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LGI Homes	4.22%	3.80%	1.98%
Lifetime Brands	-4.22%	8.01%	2.76%

Analyst Recommendations

This is a summary of recent recommendations for LGI Homes and Lifetime Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LGI Homes	2	2	2	0	2.00
Lifetime Brands	1	2	1	0	2.00

LGI Homes presently has a consensus target price of $72.75, suggesting a potential upside of 29.68%. Lifetime Brands has a consensus target price of $8.50, suggesting a potential downside of 1.33%. Given LGI Homes’ higher probable upside, equities analysts clearly believe LGI Homes is more favorable than Lifetime Brands.

Summary

LGI Homes beats Lifetime Brands on 10 of the 13 factors compared between the two stocks.

About LGI Homes

LGI Homes, Inc. designs, constructs, and sells homes. It offers entry-level homes, such as attached and detached homes, and active adult homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. The company also engages in the wholesale business, which include building and selling homes to large institutions looking to acquire single-family rental properties. It serves customers in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland, and Utah. LGI Homes, Inc. was founded in 2003 and is headquartered in The Woodlands, Texas.

About Lifetime Brands

Lifetime Brands, Inc. designs, sources, and sells branded kitchenware, tableware, and other products for use in the home in the worldwide. The company provides kitchenware products, including kitchen tools and gadgets, cutlery, kitchen scales, thermometers, cutting boards, shears, cookware, pantryware, spice racks, and bakeware; and tableware products comprising dinnerware, stemware, flatware, and giftware. It also provides home solutions, such as thermal beverageware, bath scales, weather and outdoor household, food storage, neoprene travel, and home décor products. The company owns or licenses various brands, including the Farberware, Mikasa, Taylor, KitchenAid, Pfaltzgraff, BUILT NY, Rabbit, Kamenstein, S’well, and Fred & Friends. It serves mass market merchants, specialty stores, department stores, warehouse clubs, grocery stores, off-price retailers, food service distributors, food and beverage outlets, and e-commerce. The company sells its products directly, as well as through its retail websites. Lifetime Brands, Inc. was founded in 1945 and is headquartered in Garden City, New York.