Critical Comparison: Toll Brothers (TOL) versus Taylor Morrison Home (TMHC)

Toll Brothers (NYSE: TOL) and Taylor Morrison Home (NYSE:TMHC) are both mid-cap construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

This table compares Toll Brothers and Taylor Morrison Home’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Toll Brothers 9.21% 12.00% 5.50%
Taylor Morrison Home 2.41% 4.18% 2.21%

Analyst Ratings

This is a breakdown of current ratings for Toll Brothers and Taylor Morrison Home, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Toll Brothers 1 6 10 0 2.53
Taylor Morrison Home 0 3 1 0 2.25

Toll Brothers currently has a consensus price target of $48.07, suggesting a potential upside of 1.27%. Taylor Morrison Home has a consensus price target of $24.00, suggesting a potential downside of 1.52%. Given Toll Brothers’ stronger consensus rating and higher probable upside, analysts plainly believe Toll Brothers is more favorable than Taylor Morrison Home.

Earnings and Valuation

This table compares Toll Brothers and Taylor Morrison Home’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Toll Brothers $5.82 billion 1.34 $535.49 million $3.19 14.88
Taylor Morrison Home $3.55 billion 0.82 $52.61 million $0.62 39.31

Toll Brothers has higher revenue and earnings than Taylor Morrison Home. Toll Brothers is trading at a lower price-to-earnings ratio than Taylor Morrison Home, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

82.5% of Toll Brothers shares are owned by institutional investors. Comparatively, 59.1% of Taylor Morrison Home shares are owned by institutional investors. 8.8% of Toll Brothers shares are owned by insiders. Comparatively, 2.4% of Taylor Morrison Home shares are owned by 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.

Volatility and Risk

Toll Brothers has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, Taylor Morrison Home has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Dividends

Toll Brothers pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Taylor Morrison Home does not pay a dividend. Toll Brothers pays out 10.0% of its earnings in the form of a dividend.

Summary

Toll Brothers beats Taylor Morrison Home on 15 of the 16 factors compared between the two stocks.

Toll Brothers Company Profile

Toll Brothers, Inc. is engaged in designing, building, marketing, selling and arranging financing for detached and attached homes in luxury residential communities. The Company operates through two segments: Traditional Home Building and Toll Brothers City Living (City Living). Within the Traditional Home Building segment, it operates in five geographic segments in the United States: the North, consisting of Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York; the Mid-Atlantic, consisting of Delaware, Maryland, Pennsylvania and Virginia; the South, consisting of Florida, North Carolina and Texas; the West, consisting of Arizona, Colorado, Nevada and Washington, and California. City Living is the Company’s urban development division. Its products include Traditional Home Building Product and City Living Product. Its Traditional Home Building Product includes detached homes, move-up, executive, estate, and active-adult and age-qualified lines of home.

Taylor Morrison Home Company Profile

Taylor Morrison Home Corporation is a homebuilder, which designs, builds and sells single-family detached and attached homes. The Company is also a land developer, with a portfolio of lifestyle and master-planned communities. Its segments include East, which includes Atlanta, Charlotte, North Florida, Raleigh, Southwest Florida and Tampa; Central, which includes Austin, Dallas, and Houston (each of the Dallas and Houston markets include both a Taylor Morrison division and a Darling Homes division); West, which includes Bay Area, Chicago, Denver, Phoenix, Sacramento and Southern California, and Mortgage Operations, which includes Taylor Morrison Home Funding, LLC (TMHF) and Inspired Title Services, LLC (Inspired Title). It operates under the Taylor Morrison and Darling Homes brand names. The Company also provides financial services to customers through its mortgage subsidiary, TMHF, and title insurance and closing settlement services through its title company, Inspired Title.

Receive News & Ratings for Toll Brothers Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Toll Brothers and related companies with MarketBeat.com's FREE daily email newsletter.

Comments

Leave a Reply


share news on Facebook
tweet this investment news
share on linkedin
share on StockTwits
share on Google Plus
share on reddit