Meritage Homes (NYSE:MTH) versus Universal Electronics (NASDAQ:UEIC) Financial Contrast

Universal Electronics (NASDAQ:UEIC) and Meritage Homes (NYSE:MTH) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Insider & Institutional Ownership

79.3% of Universal Electronics shares are owned by institutional investors. Comparatively, 98.4% of Meritage Homes shares are owned by institutional investors. 17.1% of Universal Electronics shares are owned by insiders. Comparatively, 2.5% of Meritage Homes shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Universal Electronics and Meritage Homes”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Electronics	$330.57 million	0.20	-$18.60 million	($1.16)	-4.46
Meritage Homes	$5.86 billion	0.73	$453.01 million	$4.78	13.72

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

Profitability

This table compares Universal Electronics and Meritage Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Electronics	-4.57%	2.70%	1.44%
Meritage Homes	6.11%	7.13%	4.83%

Risk & Volatility

Universal Electronics has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Meritage Homes has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Universal Electronics and Meritage Homes, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Electronics	1	2	0	0	1.67
Meritage Homes	0	7	5	0	2.42

Universal Electronics currently has a consensus price target of $4.25, indicating a potential downside of 17.87%. Meritage Homes has a consensus price target of $79.25, indicating a potential upside of 20.84%. Given Meritage Homes’ stronger consensus rating and higher possible upside, analysts clearly believe Meritage Homes is more favorable than Universal Electronics.

Summary

Meritage Homes beats Universal Electronics on 13 of the 14 factors compared between the two stocks.

About Universal Electronics

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.

About Meritage Homes

Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family attached and detached homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for entry-level and first move-up buyers in Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company also offers title and escrow, mortgage, insurance, and closing/settlement services to its homebuyers. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.