Critical Review: Taylor Morrison Home Corp (TMHC) & PulteGroup (PHM)
Taylor Morrison Home Corp (NASDAQ: TMHC) and PulteGroup (NYSE:PHM) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.
Valuation & Earnings
This table compares Taylor Morrison Home Corp and PulteGroup’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Taylor Morrison Home Corp||$3.73 billion||0.39||$344.81 million||N/A||N/A|
|PulteGroup||$8.09 billion||0.96||$1.11 billion||$1.80||14.31|
PulteGroup has higher revenue and earnings than Taylor Morrison Home Corp.
PulteGroup pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. Taylor Morrison Home Corp does not pay a dividend. PulteGroup pays out 20.0% of its earnings in the form of a dividend. Taylor Morrison Home Corp has raised its dividend for 3 consecutive years.
Institutional & Insider Ownership
85.8% of PulteGroup shares are owned by institutional investors. 0.7% of PulteGroup shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Taylor Morrison Home Corp and PulteGroup’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Taylor Morrison Home Corp||6.16%||9.57%||5.34%|
This is a summary of recent ratings and target prices for Taylor Morrison Home Corp and PulteGroup, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Taylor Morrison Home Corp||0||5||1||0||2.17|
Taylor Morrison Home Corp currently has a consensus price target of $22.20, indicating a potential upside of 9.85%. PulteGroup has a consensus price target of $24.91, indicating a potential downside of 3.30%. Given Taylor Morrison Home Corp’s higher possible upside, equities research analysts clearly believe Taylor Morrison Home Corp is more favorable than PulteGroup.
PulteGroup beats Taylor Morrison Home Corp on 12 of the 15 factors compared between the two stocks.
Taylor Morrison Home Corp Company Profile
Taylor Morrison Home Corporation is a homebuilder, which designs, builds and sells single-family detached and attached homes. The Company is also a land developer, with a portfolio of lifestyle and master-planned communities. Its segments include East, which includes Atlanta, Charlotte, North Florida, Raleigh, Southwest Florida and Tampa; Central, which includes Austin, Dallas, and Houston (each of the Dallas and Houston markets include both a Taylor Morrison division and a Darling Homes division); West, which includes Bay Area, Chicago, Denver, Phoenix, Sacramento and Southern California, and Mortgage Operations, which includes Taylor Morrison Home Funding, LLC (TMHF) and Inspired Title Services, LLC (Inspired Title). It operates under the Taylor Morrison and Darling Homes brand names. The Company also provides financial services to customers through its mortgage subsidiary, TMHF, and title insurance and closing settlement services through its title company, Inspired Title.
PulteGroup Company Profile
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.
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