Taylor Morrison Home Corp (NASDAQ: TMHC) and KB Home (NYSE:KBH) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Dividends

KB Home pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Taylor Morrison Home Corp does not pay a dividend. KB Home pays out 7.2% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Taylor Morrison Home Corp and KB Home’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Taylor Morrison Home Corp N/A N/A N/A N/A N/A
KB Home $3.59 billion 0.65 $105.61 million $1.39 19.51

KB Home has higher revenue and earnings than Taylor Morrison Home Corp.

Institutional and Insider Ownership

97.6% of KB Home shares are held by institutional investors. 8.6% of KB Home shares are held 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.

Profitability

This table compares Taylor Morrison Home Corp and KB Home’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%
KB Home 3.22% 7.57% 2.66%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Taylor Morrison Home Corp and KB Home, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Taylor Morrison Home Corp 0 3 1 0 2.25
KB Home 4 12 0 0 1.75

Taylor Morrison Home Corp presently has a consensus price target of $23.25, indicating a potential upside of 1.26%. KB Home has a consensus price target of $21.50, indicating a potential downside of 20.72%. Given Taylor Morrison Home Corp’s stronger consensus rating and higher possible upside, research analysts plainly believe Taylor Morrison Home Corp is more favorable than KB Home.

Summary

Taylor Morrison Home Corp beats KB Home on 7 of the 11 factors compared between the two stocks.

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.

About KB Home

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.

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