M.D.C. Holdings (NYSE: MDC) and TRI Pointe Group (NYSE:TPH) are both construction companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.
Insider and Institutional Ownership
80.2% of M.D.C. Holdings shares are owned by institutional investors. Comparatively, 98.7% of TRI Pointe Group shares are owned by institutional investors. 25.3% of M.D.C. Holdings shares are owned by company insiders. Comparatively, 9.4% of TRI Pointe Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares M.D.C. Holdings and TRI Pointe Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|M.D.C. Holdings||$2.58 billion||0.66||$199.46 million||$2.36||13.78|
|TRI Pointe Group||$2.32 billion||0.90||$210.85 million||$0.84||16.40|
TRI Pointe Group has higher revenue, but lower earnings than M.D.C. Holdings. M.D.C. Holdings is trading at a lower price-to-earnings ratio than TRI Pointe Group, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
M.D.C. Holdings has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, TRI Pointe Group has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500.
This table compares M.D.C. Holdings and TRI Pointe Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TRI Pointe Group||5.77%||7.32%||3.71%|
This is a summary of current ratings and recommmendations for M.D.C. Holdings and TRI Pointe Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TRI Pointe Group||1||4||3||0||2.25|
M.D.C. Holdings currently has a consensus target price of $29.00, suggesting a potential downside of 10.99%. TRI Pointe Group has a consensus target price of $14.00, suggesting a potential upside of 1.60%. Given TRI Pointe Group’s stronger consensus rating and higher possible upside, analysts plainly believe TRI Pointe Group is more favorable than M.D.C. Holdings.
TRI Pointe Group beats M.D.C. Holdings on 9 of the 14 factors compared between the two stocks.
M.D.C. Holdings Company Profile
M.D.C. Holdings, Inc. is engaged in two primary operations, including homebuilding and financial services. The Company’s segments include West, including segments located in Arizona, California, Nevada and Washington; Mountain, including segments located in Colorado and Utah; East, including segments located in Virginia, Florida and Maryland, which includes Pennsylvania and New Jersey; mortgage operations, including HomeAmerican Mortgage Corporation, and Other, which includes Allegiant Insurance Company, Inc., StarAmerican Insurance Ltd., American Home Insurance Agency, Inc. and American Home Title and Escrow Company. The homebuilding operations consist of subsidiary companies that purchases finished lots or develop lots necessary for the construction and sale of single-family detached homes to first-time and first-time move-up homebuyers under the name Richmond American Homes. It also includes land acquisition and development, home construction, and sales and marketing.
TRI Pointe Group Company Profile
TRI Pointe Group, Inc. is a homebuilder company. The Company’s operations are organized in two principal businesses, including homebuilding and financial services. Its homebuilding operation consists of six segments: Maracay Homes, including operations in Arizona; Pardee Homes, consisting of operations in California and Nevada; Quadrant Homes, consisting of operations in Washington; Trendmaker Homes, consisting of operations in Texas; TRI Pointe Homes, consisting of operations in California and Colorado, and Winchester Homes, consisting of operations in Maryland and Virginia. Its financial services operation (TRI Pointe Solutions) includes mortgage financing operations and title services operations. Its mortgage financing operation (TRI Pointe Connect) provides mortgage financing to its homebuyers in all of its operated markets. Its title services operation (TRI Pointe Assurance) provides title examinations for its homebuyers in its Trendmaker Homes and Winchester Homes brands.
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