Ryland Group (NYSE: RYL) and Toll Brothers (NYSE:TOL) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Ryland Group and Toll Brothers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ryland Group 0 0 0 0 N/A
Toll Brothers 1 7 8 0 2.44

Toll Brothers has a consensus price target of $39.90, indicating a potential upside of 1.12%. Given Toll Brothers’ higher probable upside, analysts plainly believe Toll Brothers is more favorable than Ryland Group.

Profitability

This table compares Ryland Group and Toll Brothers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ryland Group 6.52% 14.91% 5.79%
Toll Brothers 8.12% 10.44% 4.67%

Dividends

Toll Brothers pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Ryland Group does not pay a dividend. Toll Brothers pays out 11.9% of its earnings in the form of a dividend.

Institutional & Insider Ownership

80.7% of Toll Brothers shares are owned by institutional investors. 8.8% of Toll Brothers shares are owned by 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.

Valuation & Earnings

This table compares Ryland Group and Toll Brothers’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ryland Group N/A N/A N/A N/A N/A
Toll Brothers $5.64 billion 1.14 $534.25 million $2.69 14.67

Toll Brothers has higher revenue and earnings than Ryland Group.

Summary

Toll Brothers beats Ryland Group on 8 of the 11 factors compared between the two stocks.

Ryland Group Company Profile

The Ryland Group, Inc. is a homebuilder and a mortgage-finance company. RMC Mortgage Corporation and its subsidiaries (RMCMC) and Ryland Mortgage Company provides mortgage financing and related services for more than 255,000 homebuyers. The Company consists of six reportable segments: four geographically determined homebuilding regions; financial services, and corporate. The Company’s business is conducted and located in the United States, and its operations span all aspects of the homebuying process from design, construction and sale to mortgage origination, title and escrow services. The Company generally builds homes for entry-level buyers and first and second-time move-up buyers. The financial services segment provides mortgage-related products and services, as well as title and escrow services, to its homebuyers. Corporate is a non-operating business segment, which is engaged in supporting operations.

Toll Brothers Company Profile

Toll Brothers, Inc. is engaged in designing, building, marketing, selling and arranging financing for detached and attached homes in luxury residential communities. The Company operates through two segments: Traditional Home Building and Toll Brothers City Living (City Living). Within the Traditional Home Building segment, it operates in five geographic segments in the United States: the North, consisting of Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York; the Mid-Atlantic, consisting of Delaware, Maryland, Pennsylvania and Virginia; the South, consisting of Florida, North Carolina and Texas; the West, consisting of Arizona, Colorado, Nevada and Washington, and California. City Living is the Company’s urban development division. Its products include Traditional Home Building Product and City Living Product. Its Traditional Home Building Product includes detached homes, move-up, executive, estate, and active-adult and age-qualified lines of home.

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