AV Homes (NASDAQ: AVHI) and Meritage Homes (NYSE:MTH) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Insider & Institutional Ownership
86.4% of AV Homes shares are owned by institutional investors. Comparatively, 93.1% of Meritage Homes shares are owned by institutional investors. 7.7% of AV Homes shares are owned by company insiders. Comparatively, 5.5% of Meritage Homes shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares AV Homes and Meritage Homes’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|AV Homes||$843.25 million||0.57||-$21.93 million||$0.74||29.12|
|Meritage Homes||$3.23 billion||0.58||$143.25 million||$3.88||11.86|
Meritage Homes has higher revenue and earnings than AV Homes. Meritage Homes is trading at a lower price-to-earnings ratio than AV Homes, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and price targets for AV Homes and Meritage Homes, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Meritage Homes has a consensus target price of $51.70, suggesting a potential upside of 12.39%. Given Meritage Homes’ stronger consensus rating and higher possible upside, analysts clearly believe Meritage Homes is more favorable than AV Homes.
Risk and Volatility
AV Homes has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Meritage Homes has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.
This table compares AV Homes and Meritage Homes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Meritage Homes beats AV Homes on 12 of the 14 factors compared between the two stocks.
AV Homes Company Profile
AV Homes, Inc. engages in the homebuilding and community development businesses in Florida, the Carolinas, Arizona, and Texas markets. The company is involved in the acquisition, development, and building of active adult communities, which are age-restricted to the age 55 and over active adult demographic; and primary residential home communities under local Savvy Homes, Bonterra Builders, Royal Oak Homes, and Oakdale-Hampton brands for first-time and move-up buyers. It also engages in the construction and sale of residences within the communities. In addition, the company is involved in other real estate activities, such as the operation of amenities; and the sale of land for third-party development. As of December 31, 2017, it owned 4,911 developed residential lots; 2,395 partially developed residential lots; 8,776 undeveloped residential lots; and 6,980 acres of mixed-use, commercial, and industrial land. The company was formerly known as Avatar Holdings Inc. and changed its name to AV Homes, Inc. in February 2012. AV Homes, Inc. was founded in 1970 and is headquartered in Scottsdale, Arizona.
Meritage Homes Company Profile
Meritage Homes Corporation designs and builds single-family homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for various homebuyers, including first-time, move-up, active-adult, and luxury homes under the Meritage Homes brand name. The company also provides warranty and customer services; and insurance and closing/settlement services for its homebuyers. It builds and sells homes in Texas, Arizona, California, Colorado, Florida, North Carolina, South Carolina, Georgia, and Tennessee. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.
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