Head-To-Head Comparison: Alexander & Baldwin Holdings (ALEX) and Gafisa SA (GFA)

Gafisa SA (NYSE: GFA) and Alexander & Baldwin Holdings (NYSE:ALEX) are both construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Dividends

Alexander & Baldwin Holdings pays an annual dividend of $0.28 per share and has a dividend yield of 0.7%. Gafisa SA does not pay a dividend. Alexander & Baldwin Holdings pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander & Baldwin Holdings has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Gafisa SA and Alexander & Baldwin Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gafisa SA 1 0 0 0 1.00
Alexander & Baldwin Holdings 0 1 1 0 2.50

Alexander & Baldwin Holdings has a consensus target price of $47.00, indicating a potential upside of 11.77%. Given Alexander & Baldwin Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe Alexander & Baldwin Holdings is more favorable than Gafisa SA.

Risk & Volatility

Gafisa SA has a beta of 2.02, indicating that its share price is 102% more volatile than the S&P 500. Comparatively, Alexander & Baldwin Holdings has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500.

Insider & Institutional Ownership

5.0% of Gafisa SA shares are held by institutional investors. Comparatively, 75.6% of Alexander & Baldwin Holdings shares are held by institutional investors. 7.6% of Alexander & Baldwin Holdings shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Gafisa SA and Alexander & Baldwin Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gafisa SA -120.24% -25.46% -9.69%
Alexander & Baldwin Holdings 2.09% 3.72% 2.07%

Earnings & Valuation

This table compares Gafisa SA and Alexander & Baldwin Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gafisa SA $281.75 million 0.36 -$67.03 million ($28.71) -0.25
Alexander & Baldwin Holdings $405.40 million 5.10 $102.20 million $0.21 200.24

Alexander & Baldwin Holdings has higher revenue and earnings than Gafisa SA. Gafisa SA is trading at a lower price-to-earnings ratio than Alexander & Baldwin Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Alexander & Baldwin Holdings beats Gafisa SA on 14 of the 16 factors compared between the two stocks.

About Gafisa SA

Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.

About Alexander & Baldwin Holdings

Alexander & Baldwin, Inc. (A&B) is a real estate company. The Company operates through three segments: Commercial Real Estate, Land Operations, and Materials and Construction. In addition to its 15 retail centers in Hawaii, the Company owned seven industrial assets, seven office properties and a portfolio of urban ground leases comprising 106 acres in Hawaii, as of December 31, 2016. On the United States mainland, the Company owned seven remaining commercial assets, as of December 31, 2016. The Commercial Real Estate segment owns, operates and manages retail, industrial and office properties in Hawaii and on the Mainland. The Land Operations segment manages the Company’s land and real estate-related assets and deploys these assets to their use. The Materials and Construction segment performs asphalt paving as prime contractor and subcontractor; imports and sells liquid asphalt; mines, processes and sells basalt aggregate, and produces and sells asphaltic and ready-mix concrete.

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