Critical Review: William Lyon Homes (WLH) versus The Competition

William Lyon Homes (NYSE: WLH) is one of 20 public companies in the “Operative builders” industry, but how does it compare to its rivals? We will compare William Lyon Homes to related businesses based on the strength of its institutional ownership, risk, earnings, analyst recommendations, valuation, profitability and dividends.

Valuation & Earnings

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This table compares William Lyon Homes and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
William Lyon Homes $1.80 billion $48.13 million 12.90
William Lyon Homes Competitors $4.16 billion $217.90 million 13.99

William Lyon Homes’ rivals have higher revenue and earnings than William Lyon Homes. William Lyon Homes is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

82.1% of William Lyon Homes shares are held by institutional investors. Comparatively, 77.9% of shares of all “Operative builders” companies are held by institutional investors. 21.3% of William Lyon Homes shares are held by insiders. Comparatively, 16.0% of shares of all “Operative builders” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.


This table compares William Lyon Homes and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
William Lyon Homes 2.68% 10.51% 4.12%
William Lyon Homes Competitors 2.26% 7.08% 5.25%

Analyst Ratings

This is a breakdown of current ratings and target prices for William Lyon Homes and its rivals, as provided by

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
William Lyon Homes 0 1 2 0 2.67
William Lyon Homes Competitors 240 915 802 52 2.33

William Lyon Homes presently has a consensus price target of $33.00, suggesting a potential upside of 15.75%. As a group, “Operative builders” companies have a potential downside of 12.40%. Given William Lyon Homes’ stronger consensus rating and higher possible upside, research analysts clearly believe William Lyon Homes is more favorable than its rivals.

Volatility and Risk

William Lyon Homes has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, William Lyon Homes’ rivals have a beta of 1.10, suggesting that their average stock price is 10% more volatile than the S&P 500.


William Lyon Homes beats its rivals on 8 of the 13 factors compared.

William Lyon Homes Company Profile

William Lyon Homes is primarily engaged in the design, construction and sale of single family detached and attached homes in California, Arizona and Nevada. The Company conducts its homebuilding operations through four reportable operating segments: Southern California, Northern California, Arizona and Nevada. For the three months ended March 31, 2012, 37% of home closings were derived from the Company’s California operations. The Company designs, constructs and sells a range of homes designed to meet the needs of each of its markets, although it primarily focuses sales to the entry-level and first time move-up home buyer markets. During the year ended December 31, 2011, the Company marketed its homes through 19 sales locations. In October 2013, the Company purchase 221 homesites at the master-planned Southshore community in Aurora, Colorado.

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