PICO Holdings (NASDAQ: PICO) and KB Home (NYSE:KBH) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitabiliy.

Valuation and Earnings

This table compares PICO Holdings and KB Home’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PICO Holdings $383.39 million 1.04 -$181,999.00 ($0.46) -37.50
KB Home $3.93 billion 0.52 $247.11 million $1.30 18.33

KB Home has higher revenue and earnings than PICO Holdings. PICO Holdings is trading at a lower price-to-earnings ratio than KB Home, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PICO Holdings and KB Home’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PICO Holdings -3.26% -1.79% -1.14%
KB Home 3.13% 7.11% 2.45%

Dividends

KB Home pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. PICO Holdings does not pay a dividend. KB Home pays out 7.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for PICO Holdings and KB Home, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PICO Holdings 0 0 0 0 N/A
KB Home 4 13 1 0 1.83

KB Home has a consensus price target of $19.67, suggesting a potential downside of 17.47%. Given KB Home’s higher probable upside, analysts plainly believe KB Home is more favorable than PICO Holdings.

Risk & Volatility

PICO Holdings has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, KB Home has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Insider & Institutional Ownership

63.3% of PICO Holdings shares are held by institutional investors. Comparatively, 98.8% of KB Home shares are held by institutional investors. 4.7% of PICO Holdings shares are held by company insiders. Comparatively, 8.6% of KB Home shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

KB Home beats PICO Holdings on 12 of the 14 factors compared between the two stocks.

About PICO Holdings

PICO Holdings, Inc. (PICO) is a holding company. The Company’s segments include Water Resource and Water Storage Operations; Real Estate Operations, and Corporate. Its subsidiary, Vidler Water Company, Inc. (Vidler), owns water resources and water storage operations in the southwestern United States, with assets and operations in Nevada, Arizona, Colorado and New Mexico. The Real Estate Operations are conducted through UCP, Inc. (UCP), which is a homebuilder and land developer in markets located in California, Washington State, North Carolina, South Carolina and Tennessee. The Corporate segment includes its investments in small businesses, typically venture capital-type situations. As of December 31, 2016, the Company owned a membership interest in, and was the managing partner of, Fish Springs Ranch, LLC (FSR), which owned the Fish Springs Ranch and other properties totaling approximately 7,313 acres in Honey Lake Valley in Washoe County, approximately 40 miles north of Reno, Nevada.

About KB Home

KB HOME is a homebuilding company. The Company is engaged in selling and building a range of new homes designed primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family residential homes. It operates through five segments, which consist of four homebuilding segments and one financial services segment. Its homebuilding segments include West Coast, Southwest, Central and Southeast. The homebuilding segments are engaged in the acquisition and development of land primarily for residential purposes. The financial services segment offers property and casualty insurance and, in certain instances, earthquake, flood and personal property insurance to its homebuyers in the same markets as its homebuilding segments, and provides title services in the majority of markets located within its Central and Southeast homebuilding segments. It offers homes in development communities, at urban in-fill locations and as part of mixed-use projects.

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