Contrasting LGI Homes (NASDAQ:LGIH) & Berkeley Group (OTCMKTS:BKGFY)

Berkeley Group (OTCMKTS:BKGFY) and LGI Homes (NASDAQ:LGIH) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

84.9% of LGI Homes shares are owned by institutional investors. 12.3% of LGI Homes shares are owned by company 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 Berkeley Group and LGI Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Berkeley Group	N/A	N/A	N/A
LGI Homes	5.93%	5.50%	2.88%

Valuation and Earnings

This table compares Berkeley Group and LGI Homes”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Berkeley Group	$3.18 billion	1.70	$489.30 million	N/A	N/A
LGI Homes	$2.20 billion	0.53	$196.07 million	$4.53	11.07

Berkeley Group has higher revenue and earnings than LGI Homes.

Analyst Recommendations

This is a summary of current ratings and price targets for Berkeley Group and LGI Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Berkeley Group	2	3	1	1	2.14
LGI Homes	2	1	3	0	2.17

LGI Homes has a consensus price target of $76.70, indicating a potential upside of 52.97%. Given LGI Homes’ stronger consensus rating and higher probable upside, analysts plainly believe LGI Homes is more favorable than Berkeley Group.

Risk and Volatility

Berkeley Group has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, LGI Homes has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Summary

LGI Homes beats Berkeley Group on 9 of the 13 factors compared between the two stocks.

About Berkeley Group

The Berkeley Group Holdings plc, together with its subsidiaries, engages in the residential-led and mixed-use property development and ancillary activities in the United Kingdom. The company is involved in land selling activities. It operates under the Berkeley, St Edward, St George, St James, St Joseph, and St William brand names. The Berkeley Group Holdings plc was founded in 1976 and is headquartered in Cobham, the United Kingdom.

About LGI Homes

LGI Homes, Inc. designs, constructs, and sells homes. It offers entry-level homes, such as attached and detached homes, and active adult homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. The company also engages in the wholesale business, which include building and selling homes to large institutions looking to acquire single-family rental properties. It serves customers in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland, and Utah. LGI Homes, Inc. was founded in 2003 and is headquartered in The Woodlands, Texas.