Analyzing Toll Brothers (TOL) & Its Peers

Toll Brothers (NYSE: TOL) is one of 23 public companies in the “Homebuilding” industry, but how does it compare to its competitors? We will compare Toll Brothers to similar businesses based on the strength of its valuation, risk, analyst recommendations, dividends, profitability, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Toll Brothers and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Toll Brothers 1 6 8 0 2.47
Toll Brothers Competitors 263 1565 1604 26 2.40

Toll Brothers presently has a consensus price target of $44.00, indicating a potential downside of 11.42%. As a group, “Homebuilding” companies have a potential upside of 0.07%. Given Toll Brothers’ competitors higher probable upside, analysts clearly believe Toll Brothers has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares Toll Brothers and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Toll Brothers $5.17 billion $382.09 million 18.46
Toll Brothers Competitors $3.83 billion $231.12 million 458.20

Toll Brothers has higher revenue and earnings than its competitors. Toll Brothers is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

Toll Brothers pays an annual dividend of $0.32 per share and has a dividend yield of 0.6%. Toll Brothers pays out 11.9% of its earnings in the form of a dividend. As a group, “Homebuilding” companies pay a dividend yield of 0.8% and pay out 14.5% of their earnings in the form of a dividend.

Profitability

This table compares Toll Brothers and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Toll Brothers 8.12% 10.44% 4.67%
Toll Brothers Competitors 9.75% 14.94% 7.99%

Risk and Volatility

Toll Brothers has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Toll Brothers’ competitors have a beta of 1.52, meaning that their average share price is 52% more volatile than the S&P 500.

Institutional and Insider Ownership

82.5% of Toll Brothers shares are owned by institutional investors. Comparatively, 79.0% of shares of all “Homebuilding” companies are owned by institutional investors. 8.8% of Toll Brothers shares are owned by insiders. Comparatively, 13.1% of shares of all “Homebuilding” companies are owned by 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.

Summary

Toll Brothers competitors beat Toll Brothers on 8 of the 15 factors compared.

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.

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