Ryland Group (RYL) vs. LGI Homes (LGIH) Head to Head Contrast

Ryland Group (NYSE: RYL) and LGI Homes (NASDAQ:LGIH) are both small-cap cyclical consumer goods & services companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitabiliy, risk, dividends, earnings and institutional ownership.

Profitability

This table compares Ryland Group and LGI Homes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ryland Group 6.52% 14.91% 5.79%
LGI Homes 9.22% 23.65% 10.25%

Earnings and Valuation

This table compares Ryland Group and LGI Homes’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ryland Group N/A N/A N/A N/A N/A
LGI Homes $940.22 million 1.04 $129.35 million $3.78 11.98

LGI Homes has higher revenue and earnings than Ryland Group.

Institutional and Insider Ownership

87.7% of LGI Homes shares are held by institutional investors. 13.6% of LGI Homes shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Ryland Group and LGI Homes, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ryland Group 0 0 0 0 N/A
LGI Homes 0 4 1 0 2.20

LGI Homes has a consensus target price of $43.00, suggesting a potential downside of 5.06%. Given LGI Homes’ higher possible upside, analysts plainly believe LGI Homes is more favorable than Ryland Group.

Summary

LGI Homes beats Ryland Group on 8 of the 9 factors compared between the two stocks.

About Ryland Group

The Ryland Group, Inc. is a homebuilder and a mortgage-finance company. RMC Mortgage Corporation and its subsidiaries (RMCMC) and Ryland Mortgage Company provides mortgage financing and related services for more than 255,000 homebuyers. The Company consists of six reportable segments: four geographically determined homebuilding regions; financial services, and corporate. The Company’s business is conducted and located in the United States, and its operations span all aspects of the homebuying process from design, construction and sale to mortgage origination, title and escrow services. The Company generally builds homes for entry-level buyers and first and second-time move-up buyers. The financial services segment provides mortgage-related products and services, as well as title and escrow services, to its homebuyers. Corporate is a non-operating business segment, which is engaged in supporting operations.

About LGI Homes

LGI Homes, Inc. is a homebuilder and land developer. The Company is engaged in the design, construction, marketing and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington and Tennessee. The Company operates through five segments: the Texas division, the Southwest division, the Southeast division, the Florida division and the Northwest division. The Texas division includes homebuilding operations in Houston, Dallas/Fort Worth, San Antonio and Austin locations. The Southwest division includes homebuilding operations in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs locations. The Southeast division includes homebuilding operations in Atlanta, Charlotte and Nashville locations. The Florida division includes homebuilding operations in Tampa, Orlando, Fort Myers and Jacksonville locations. The Northwest division includes homebuilding operations in Seattle location.

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