Reviewing PulteGroup (PHM) and PICO Holdings (PICO)
PulteGroup (NYSE: PHM) and PICO Holdings (NASDAQ:PICO) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitabiliy, valuation, institutional ownership, earnings and dividends.
This table compares PulteGroup and PICO Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares PulteGroup and PICO Holdings’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PulteGroup||$7.86 billion||0.97||$1.05 billion||$1.82||13.27|
|PICO Holdings||$383.39 million||1.02||-$181,999.00||($0.46)||-36.74|
PulteGroup has higher revenue and earnings than PICO Holdings. PICO Holdings is trading at a lower price-to-earnings ratio than PulteGroup, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
PulteGroup has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, PICO Holdings has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.
This is a summary of recent ratings for PulteGroup and PICO Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PulteGroup presently has a consensus price target of $24.60, indicating a potential upside of 1.82%. Given PulteGroup’s higher probable upside, research analysts clearly believe PulteGroup is more favorable than PICO Holdings.
PulteGroup pays an annual dividend of $0.36 per share and has a dividend yield of 1.5%. PICO Holdings does not pay a dividend. PulteGroup pays out 19.8% of its earnings in the form of a dividend. PulteGroup has raised its dividend for 3 consecutive years.
Insider and Institutional Ownership
87.5% of PulteGroup shares are owned by institutional investors. Comparatively, 63.3% of PICO Holdings shares are owned by institutional investors. 0.7% of PulteGroup shares are owned by company insiders. Comparatively, 4.7% of PICO Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
PulteGroup beats PICO Holdings on 11 of the 15 factors compared between the two stocks.
PulteGroup, Inc. is a homebuilder in the United States. The Company’s segments include Homebuilding and Financial Services. Its Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the United States and the construction of housing on such land. Its Financial Services operations consist principally of mortgage banking and title operations. The Company conducts its financial services business, through Pulte Mortgage LLC (Pulte Mortgage) and other subsidiaries. Pulte Mortgage arranges financing through the origination of mortgage loans. The Company’s subsidiaries are engaged in the homebuilding business. It offers a product line to meet the needs of homebuyers in its focused markets. Through its brands, which include Centex, Pulte Homes, Del Webb, DiVosta Homes, and John Wieland Homes and Neighborhoods, the Company offers a range of home designs, including single-family detached, townhouses, condominiums and duplexes.
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.
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