Taylor Morrison Home Corp (NASDAQ: TMHC) and New Home Company Inc. (The) (NYSE:NWHM) are both small-cap cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitability, valuation, analyst recommendations and risk.

Insider and Institutional Ownership

57.2% of New Home Company Inc. (The) shares are owned by institutional investors. 24.2% of New Home Company Inc. (The) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Taylor Morrison Home Corp and New Home Company Inc. (The), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taylor Morrison Home Corp 0 5 1 0 2.17
New Home Company Inc. (The) 0 0 0 0 N/A

Taylor Morrison Home Corp presently has a consensus price target of $22.20, indicating a potential upside of 9.85%. Given Taylor Morrison Home Corp’s higher probable upside, research analysts plainly believe Taylor Morrison Home Corp is more favorable than New Home Company Inc. (The).

Profitability

This table compares Taylor Morrison Home Corp and New Home Company Inc. (The)’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%
New Home Company Inc. (The) 2.82% 10.25% 4.74%

Valuation and Earnings

This table compares Taylor Morrison Home Corp and New Home Company Inc. (The)’s gross 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
New Home Company Inc. (The) $769.49 million 0.27 $36.07 million $1.04 9.72

Taylor Morrison Home Corp has higher revenue and earnings than New Home Company Inc. (The).

Summary

Taylor Morrison Home Corp beats New Home Company Inc. (The) on 8 of the 11 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.

New Home Company Inc. (The) Company Profile

The New Home Company Inc. is a homebuilding company. The Company focuses on the design, construction and sale of consumer-driven homes in various metropolitan areas within certain markets in California and Arizona, including coastal Southern California, the San Francisco Bay area, metro Sacramento and the greater Phoenix area. The Company’s segments include homebuilding and fee building. The homebuilding operations consist of divisions in Northern California, Southern California and its division in Arizona, which is established through the purchase of lots in an unconsolidated joint venture. The Company is focused on building and selling homes for its own account. It is focused on identifying sites and creating communities that allow it to design, construct and sell consumer-driven single-family detached and attached homes in major metropolitan areas in coastal Southern California, the San Francisco Bay area, metro Sacramento and the greater Phoenix area.

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