Analyzing Toll Brothers (NYSE:TOL) and The Competition

Toll Brothers (NYSE: TOL) is one of 24 public companies in the “Homebuilding” industry, but how does it contrast to its peers? We will compare Toll Brothers to related companies based on the strength of its institutional ownership, valuation, risk, dividends, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and target prices for Toll Brothers and its peers, 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 282 1681 1925 38 2.44

Toll Brothers presently has a consensus target price of $44.00, indicating a potential downside of 13.15%. As a group, “Homebuilding” companies have a potential downside of 1.37%. Given Toll Brothers’ peers higher probable upside, analysts clearly believe Toll Brothers has less favorable growth aspects than its peers.

Institutional and Insider Ownership

82.5% of Toll Brothers shares are owned by institutional investors. Comparatively, 78.9% 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, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

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

Gross Revenue Net Income Price/Earnings Ratio
Toll Brothers $5.17 billion $382.09 million 18.90
Toll Brothers Competitors $3.83 billion $231.12 million 498.80

Toll Brothers has higher revenue and earnings than its peers. Toll Brothers is trading at a lower price-to-earnings ratio than its peers, 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.

Risk and Volatility

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

Profitability

This table compares Toll Brothers and its peers’ 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 9.74% 14.79% 7.94%

Summary

Toll Brothers peers 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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