Beazer Homes USA (NYSE: BZH) and Taylor Morrison Home Corp (NASDAQ:TMHC) are both small-cap construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Earnings & Valuation

This table compares Beazer Homes USA and Taylor Morrison Home Corp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Beazer Homes USA $1.88 billion 0.34 $74.43 million ($0.08) -246.34
Taylor Morrison Home Corp $3.73 billion 0.44 $344.81 million N/A N/A

Taylor Morrison Home Corp has higher revenue and earnings than Beazer Homes USA.

Insider & Institutional Ownership

80.7% of Beazer Homes USA shares are held by institutional investors. 7.6% of Beazer Homes USA shares are held 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.

Profitability

This table compares Beazer Homes USA and Taylor Morrison Home Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Beazer Homes USA -0.14% 3.01% 0.88%
Taylor Morrison Home Corp 6.16% 9.57% 5.34%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Beazer Homes USA and Taylor Morrison Home Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Beazer Homes USA 1 4 1 0 2.00
Taylor Morrison Home Corp 0 3 1 0 2.25

Beazer Homes USA presently has a consensus target price of $15.13, indicating a potential downside of 23.26%. Taylor Morrison Home Corp has a consensus target price of $23.25, indicating a potential upside of 2.33%. Given Taylor Morrison Home Corp’s stronger consensus rating and higher possible upside, analysts clearly believe Taylor Morrison Home Corp is more favorable than Beazer Homes USA.

Summary

Taylor Morrison Home Corp beats Beazer Homes USA on 8 of the 10 factors compared between the two stocks.

About Beazer Homes USA

Beazer Homes USA, Inc. is a geographically diversified homebuilder. As of September 30, 2016, the Company had operations in 13 states within over three geographic regions in the United States. The Company’s segments include West, East and Southeast. The Company markets and sells its products through its Website, www.beazer.com; mobile site, m.beazer.com; real estate listing sites, online advertising, including search engine marketing and display advertising, social media, video, brochures, direct marketing and out-of-home advertising, including billboards and signage, as well as other activities. It offers lender choice and personalization. The Company’s Choice Plans allows buyers to choose living areas, such as the kitchen and master bathroom. Its West segment includes Arizona, California, Nevada and Texas. Its East segment includes Indiana, Maryland/Delaware, Tennessee and Virginia. Its Southeast segment includes Florida, Georgia, North Carolina and South Carolina.

About Taylor Morrison Home Corp

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.

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