Critical Comparison: Persimmon (OTCMKTS:PSMMY) & Tri Pointe Homes (NYSE:TPH)

Persimmon (OTCMKTS:PSMMY) and Tri Pointe Homes (NYSE:TPH) are both mid-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Earnings and Valuation

This table compares Persimmon and Tri Pointe Homes”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Persimmon	$4.09 billion	1.42	$341.33 million	N/A	N/A
Tri Pointe Homes	$4.42 billion	0.65	$458.03 million	$4.50	7.04

Tri Pointe Homes has higher revenue and earnings than Persimmon.

Institutional & Insider Ownership

97.0% of Tri Pointe Homes shares are held by institutional investors. 0.6% of Persimmon shares are held by company insiders. Comparatively, 2.7% of Tri Pointe Homes shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Persimmon and Tri Pointe Homes, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Persimmon	1	0	1	1	2.67
Tri Pointe Homes	0	2	3	1	2.83

Tri Pointe Homes has a consensus price target of $41.60, suggesting a potential upside of 31.35%. Given Tri Pointe Homes’ stronger consensus rating and higher probable upside, analysts clearly believe Tri Pointe Homes is more favorable than Persimmon.

Profitability

This table compares Persimmon and Tri Pointe Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Persimmon	N/A	N/A	N/A
Tri Pointe Homes	10.02%	12.97%	8.86%

Risk & Volatility

Persimmon has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Tri Pointe Homes has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.

Summary

Tri Pointe Homes beats Persimmon on 10 of the 12 factors compared between the two stocks.

About Persimmon

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services under the FibreNest brand; and timber frame, insulated wall panels, and roof cassettes under the brand Space4. Further, it offers concrete bricks and roof tile. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.

About Tri Pointe Homes

Tri Pointe Homes, Inc. engages in the design, construction, and sale of single-family attached and detached homes in the United States. The company operates through a portfolio of six regional home building brands comprising Maracay in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California, Colorado, and the Carolinas; and Winchester Homes in Maryland and Northern Virginia. It operates active selling communities, and owned or controlled lots. The company sells its homes through own sales representatives and independent real estate brokers. It provides financial services, such as mortgage financing, title and escrow, and property and casualty insurance agency services. The company was formerly known as TRI Pointe Group, Inc. and changed its name to Tri Pointe Homes, Inc. in January 2021. Tri Pointe Homes, Inc. was founded in 2009 and is based in Incline Village, Nevada.