Contrasting Meritage Homes (MTH) and Its Competitors

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

Valuation & Earnings

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

Gross Revenue Net Income Price/Earnings Ratio
Meritage Homes $3.23 billion $143.25 million 11.68
Meritage Homes Competitors $4.18 billion $223.65 million 14.03

Meritage Homes’ competitors have higher revenue and earnings than Meritage Homes. Meritage Homes 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.

Analyst Recommendations

This is a summary of recent ratings for Meritage Homes and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meritage Homes 0 5 5 0 2.50
Meritage Homes Competitors 239 919 803 52 2.33

Meritage Homes currently has a consensus target price of $52.30, indicating a potential upside of 15.45%. As a group, “Operative builders” companies have a potential upside of 1.65%. Given Meritage Homes’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Meritage Homes is more favorable than its competitors.

Institutional & Insider Ownership

95.2% of Meritage Homes shares are held by institutional investors. Comparatively, 77.9% of shares of all “Operative builders” companies are held by institutional investors. 5.5% of Meritage Homes shares are held by insiders. Comparatively, 15.5% of shares of all “Operative builders” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Meritage Homes and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meritage Homes 4.44% 10.76% 5.15%
Meritage Homes Competitors 2.26% 7.08% 5.25%

Volatility & Risk

Meritage Homes has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Meritage Homes’ competitors have a beta of 1.10, meaning that their average share price is 10% more volatile than the S&P 500.

Summary

Meritage Homes beats its competitors on 7 of the 13 factors compared.

Meritage Homes Company Profile

Meritage Homes Corporation designs and builds single-family homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for various homebuyers, including first-time, move-up, active-adult, and luxury homes under the Meritage Homes brand name. The company also provides warranty and customer services; and insurance and closing/settlement services for its homebuyers. It builds and sells homes in Texas, Arizona, California, Colorado, Florida, North Carolina, South Carolina, Georgia, and Tennessee. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

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