Analyzing Somnigroup International (NYSE:SGI) & LGI Homes (NASDAQ:LGIH)

Somnigroup International (NYSE:SGI) and LGI Homes (NASDAQ:LGIH) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

99.9% of Somnigroup International shares are held by institutional investors. Comparatively, 84.9% of LGI Homes shares are held by institutional investors. 4.0% of Somnigroup International shares are held by insiders. Comparatively, 12.6% of LGI Homes shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Somnigroup International has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, LGI Homes has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Somnigroup International and LGI Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Somnigroup International	0	3	7	0	2.70
LGI Homes	2	2	2	0	2.00

Somnigroup International presently has a consensus target price of $96.12, indicating a potential upside of 45.28%. LGI Homes has a consensus target price of $72.75, indicating a potential upside of 47.01%. Given LGI Homes’ higher possible upside, analysts plainly believe LGI Homes is more favorable than Somnigroup International.

Profitability

This table compares Somnigroup International and LGI Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Somnigroup International	7.00%	19.32%	5.22%
LGI Homes	3.88%	3.55%	1.88%

Valuation & Earnings

This table compares Somnigroup International and LGI Homes”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Somnigroup International	$7.48 billion	1.86	$384.10 million	$2.50	26.47
LGI Homes	$1.71 billion	0.67	$72.55 million	$2.85	17.36

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

Summary

Somnigroup International beats LGI Homes on 10 of the 14 factors compared between the two stocks.

About Somnigroup International

Somnigroup International Inc., together with its subsidiaries, designs, manufactures, distributes, and retails bedding products in the United States and internationally. It provides mattresses, foundations and adjustable foundations, and adjustable bases, as well as other products comprising pillows, mattress covers, sheets, cushions, and various other accessories and comfort products under the Tempur-Pedic, Sealy, Stearns & Foster, Sealy, and Cocoon by Sealy brand names. The company sells its products through approximately company-owned stores, online, and call centers; and third party retailers, including third party distribution, hospitality, and healthcare. It also operates a portfolio of retail brands, including Tempur-Pedic retail stores, Sleep Outfitters, Sleep Solutions Outlet, Dreams, and SOVA; and licenses Sealy, Tempur, and Stearns & Foster brands, as well as technology and trademarks to other manufacturers. The company was formerly known as Tempur Sealy International, Inc. and changed its name to Somnigroup International Inc. in February 2025. Somnigroup International Inc. was founded in 1846 and is based in Lexington, Kentucky.

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.