KB Home (NYSE:KBH – Get Free Report) and Legacy Housing (NASDAQ:LEGH – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.
Valuation & Earnings
This table compares KB Home and Legacy Housing”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| KB Home | $6.24 billion | 0.42 | $428.79 million | $3.55 | 12.19 |
| Legacy Housing | $164.57 million | 3.96 | $41.81 million | $2.17 | 12.62 |
KB Home has higher revenue and earnings than Legacy Housing. KB Home is trading at a lower price-to-earnings ratio than Legacy Housing, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
96.1% of KB Home shares are held by institutional investors. Comparatively, 89.3% of Legacy Housing shares are held by institutional investors. 4.7% of KB Home shares are held by company insiders. Comparatively, 12.7% of Legacy Housing shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and price targets for KB Home and Legacy Housing, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KB Home | 4 | 8 | 4 | 0 | 2.00 |
| Legacy Housing | 0 | 4 | 0 | 0 | 2.00 |
KB Home currently has a consensus target price of $52.23, suggesting a potential upside of 20.71%. Legacy Housing has a consensus target price of $21.00, suggesting a potential downside of 23.33%. Given KB Home’s higher probable upside, analysts clearly believe KB Home is more favorable than Legacy Housing.
Profitability
This table compares KB Home and Legacy Housing’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KB Home | 4.39% | 6.56% | 3.71% |
| Legacy Housing | 28.56% | 9.53% | 8.74% |
Volatility and Risk
KB Home has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Legacy Housing has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.
Summary
KB Home beats Legacy Housing on 7 of the 13 factors compared between the two stocks.
About KB Home
KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.
About Legacy Housing
Legacy Housing Corporation engages in the building, sale, and financing of manufactured homes and tiny houses primarily in the southern United States. It manufactures and provides for the transport of mobile homes, including 1 to 5 bedrooms with 1 to 3 1/2 bathrooms; and provides wholesale financing to dealers and mobile home parks, as well as retail financing to consumers. The company also offers inventory financing for its independent retailers; consumer financing for its products; and financing to manufactured housing community owners that buy or lease its products for use in their rental housing communities. In addition, it involved in financing and developing new manufactured home communities. The company markets its homes under the Legacy brand through a network of independent retailers and company-owned stores; and directly to manufactured home communities. Legacy Housing Corporation was founded in 2005 and is headquartered in Bedford, Texas.
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