Reviewing TRI Pointe Group (TPH) and Lennar Corporation (LEN)
TRI Pointe Group (NYSE: TPH) and Lennar Corporation (NYSE:LEN) are both mid-cap construction companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.
Volatility and Risk
TRI Pointe Group has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, Lennar Corporation has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.
Institutional & Insider Ownership
98.7% of TRI Pointe Group shares are owned by institutional investors. Comparatively, 81.8% of Lennar Corporation shares are owned by institutional investors. 9.4% of TRI Pointe Group shares are owned by company insiders. Comparatively, 12.2% of Lennar Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for TRI Pointe Group and Lennar Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TRI Pointe Group||1||4||3||0||2.25|
TRI Pointe Group presently has a consensus price target of $14.00, indicating a potential upside of 1.38%. Lennar Corporation has a consensus price target of $56.31, indicating a potential upside of 4.50%. Given Lennar Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Lennar Corporation is more favorable than TRI Pointe Group.
Valuation and Earnings
This table compares TRI Pointe Group and Lennar Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TRI Pointe Group||$2.32 billion||0.90||$210.85 million||$0.84||16.44|
|Lennar Corporation||$11.81 billion||0.93||$1.36 billion||$3.42||15.76|
Lennar Corporation has higher revenue and earnings than TRI Pointe Group. Lennar Corporation is trading at a lower price-to-earnings ratio than TRI Pointe Group, indicating that it is currently the more affordable of the two stocks.
Lennar Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.3%. TRI Pointe Group does not pay a dividend. Lennar Corporation pays out 4.7% of its earnings in the form of a dividend.
This table compares TRI Pointe Group and Lennar Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TRI Pointe Group||5.77%||7.32%||3.71%|
Lennar Corporation beats TRI Pointe Group on 13 of the 17 factors compared between the two stocks.
TRI Pointe Group Company Profile
TRI Pointe Group, Inc. is a homebuilder company. The Company’s operations are organized in two principal businesses, including homebuilding and financial services. Its homebuilding operation consists of six segments: Maracay Homes, including operations in Arizona; Pardee Homes, consisting of operations in California and Nevada; Quadrant Homes, consisting of operations in Washington; Trendmaker Homes, consisting of operations in Texas; TRI Pointe Homes, consisting of operations in California and Colorado, and Winchester Homes, consisting of operations in Maryland and Virginia. Its financial services operation (TRI Pointe Solutions) includes mortgage financing operations and title services operations. Its mortgage financing operation (TRI Pointe Connect) provides mortgage financing to its homebuyers in all of its operated markets. Its title services operation (TRI Pointe Assurance) provides title examinations for its homebuyers in its Trendmaker Homes and Winchester Homes brands.
Lennar Corporation Company Profile
Lennar Corporation is a provider of real estate related financial services, commercial real estate, investment management and finance company. The Company is a homebuilder that operates in various states. Its segments include Homebuilding East, Homebuilding Central, Homebuilding West, Lennar Financial Services, Rialto and Lennar Multifamily. It is a developer of multifamily rental properties. Its Homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development and sale of residential land. It operates primarily under the Lennar brand name. The Lennar Financial Services segment includes mortgage financing, title insurance and closing services for both buyers of its homes and others. The Rialto segment is a real estate, investment management, and finance company. The Lennar Multifamily segment focuses on developing a portfolio of institutional multifamily rental properties in the United States markets.
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