Contrasting KB Home (KBH) & Green Brick Partners (GRBK)
KB Home (NYSE: KBH) and Green Brick Partners (NASDAQ:GRBK) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.
This is a summary of recent recommendations and price targets for KB Home and Green Brick Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Green Brick Partners||0||0||0||0||N/A|
KB Home presently has a consensus target price of $21.50, indicating a potential downside of 16.15%. Given KB Home’s higher probable upside, analysts clearly believe KB Home is more favorable than Green Brick Partners.
Valuation and Earnings
This table compares KB Home and Green Brick Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|KB Home||$4.16 billion||0.53||$277.52 million||$1.39||18.45|
|Green Brick Partners||$415.72 million||1.18||$55.33 million||$0.58||17.24|
KB Home has higher revenue and earnings than Green Brick Partners. Green Brick Partners is trading at a lower price-to-earnings ratio than KB Home, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
KB Home has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, Green Brick Partners has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.
Insider and Institutional Ownership
98.4% of KB Home shares are held by institutional investors. Comparatively, 82.7% of Green Brick Partners shares are held by institutional investors. 8.6% of KB Home shares are held by insiders. Comparatively, 53.5% of Green Brick Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares KB Home and Green Brick Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Green Brick Partners||6.69%||11.30%||8.33%|
KB Home pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Green Brick Partners does not pay a dividend. KB Home pays out 7.2% of its earnings in the form of a dividend.
KB Home beats Green Brick Partners on 8 of the 15 factors compared between the two stocks.
KB Home Company Profile
KB HOME is a homebuilding company. The Company is engaged in selling and building a range of new homes designed primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family residential homes. It operates through five segments, which consist of four homebuilding segments and one financial services segment. Its homebuilding segments include West Coast, Southwest, Central and Southeast. The homebuilding segments are engaged in the acquisition and development of land primarily for residential purposes. The financial services segment offers property and casualty insurance and, in certain instances, earthquake, flood and personal property insurance to its homebuyers in the same markets as its homebuilding segments, and provides title services in the majority of markets located within its Central and Southeast homebuilding segments. It offers homes in development communities, at urban in-fill locations and as part of mixed-use projects.
Green Brick Partners Company Profile
Green Brick Partners, Inc. operates in the real estate industry. The Company operates through two segments. The builder operations segment includes its controlled builders results, which include building and selling single-family detached homes and townhomes that are designed and built to meet local customer preferences, and the sale of lots. Builder operations consist of three operating segments: Texas, Georgia, and corporate and other. Corporate operations segment develops and implements strategic initiatives and supports its builder operations and land development by centralizing certain administrative functions, such as finance, treasury, information technology and human resources. The land development segment includes operations related to the acquisition and development of land, which is sold to its controlled builders and third-party homebuilders. As of December 31, 2016, it had owned or controlled over 5,200 home sites in various locations in the Dallas and Atlanta markets.
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