Critical Contrast: NVR (NVR) & Meritage Corporation (NYSE:MTH)
NVR (NYSE: NVR) and Meritage Corporation (NYSE:MTH) are both construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitabiliy, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.
This table compares NVR and Meritage Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
77.9% of NVR shares are owned by institutional investors. Comparatively, 97.1% of Meritage Corporation shares are owned by institutional investors. 11.3% of NVR shares are owned by insiders. Comparatively, 5.6% of Meritage Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a breakdown of current ratings and target prices for NVR and Meritage Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NVR presently has a consensus price target of $2,645.00, indicating a potential downside of 3.23%. Meritage Corporation has a consensus price target of $40.29, indicating a potential downside of 8.65%. Given NVR’s stronger consensus rating and higher possible upside, equities research analysts clearly believe NVR is more favorable than Meritage Corporation.
Volatility and Risk
NVR has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Meritage Corporation has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.
Valuation & Earnings
This table compares NVR and Meritage Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NVR||$6.12 billion||1.67||$800.07 million||$126.57||21.60|
|Meritage Corporation||$3.12 billion||0.57||$241.92 million||$3.64||12.12|
NVR has higher revenue and earnings than Meritage Corporation. Meritage Corporation is trading at a lower price-to-earnings ratio than NVR, indicating that it is currently the more affordable of the two stocks.
NVR beats Meritage Corporation on 11 of the 13 factors compared between the two stocks.
NVR Company Profile
NVR, Inc. is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings. The Company’s segments are Homebuilding Mid Atlantic, Homebuilding North East, Homebuilding Mid East, Homebuilding South East and Mortgage Banking. Its Homebuilding Mid Atlantic segment operates in various geographic regions, which include Maryland, Virginia, West Virginia, Delaware and Washington, District of Columbia (D.C.). Its Homebuilding North East segment operates in various geographic regions, which include New Jersey and Eastern Pennsylvania. Its Homebuilding Mid East segment operates in various geographic regions, which include New York, Ohio, Indiana and Illinois, The Homebuilding South East segment operates in various geographic regions, which include North Carolina, South Carolina, Florida and Tennessee. The Mortgage Banking segment provides mortgage-related services to home building customers through its mortgage banking operations.
Meritage Corporation Company Profile
Meritage Homes Corporation operates as a holding company. The Company is a designer and builder of single-family homes. The Company operates through two segments: homebuilding and financial services. The homebuilding segment is engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes, and providing warranty and customer services. It builds homes in the regions of the United States and offers a range of homes that are designed for a range of homebuyers, including first-time, move-up, active adult and luxury. As of December 31, 2016, it had homebuilding operations in three regions: West, Central and East, which were consisted of nine states: Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee. It also operates Carefree Title Agency, Inc. (Carefree Title) company. Carefree Title’s core business includes title insurance and closing/settlement services it offers to its homebuyers.
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