Meritage Homes (NYSE: MTH) is one of 20 public 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, institutional ownership, profitability, dividends, valuation, analyst recommendations and risk.
Analyst Recommendations
This is a summary of current ratings for Meritage Homes and its competitors, as provided by MarketBeat.
|
Sell Ratings |
Hold Ratings |
Buy Ratings |
Strong Buy Ratings |
Rating Score |
| Meritage Homes |
0 |
5 |
5 |
0 |
2.50 |
| Meritage Homes Competitors |
241 |
922 |
810 |
52 |
2.33 |
Meritage Homes presently has a consensus price target of $52.30, indicating a potential upside of 20.37%. As a group, “Operative builders” companies have a potential downside of 1.05%. Given Meritage Homes’ stronger consensus rating and higher probable upside, analysts clearly believe Meritage Homes is more favorable than its competitors.
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 |
2.30% |
7.26% |
5.34% |
Insider and Institutional Ownership
95.3% of Meritage Homes shares are held by institutional investors. Comparatively, 78.0% of shares of all “Operative builders” companies are held by institutional investors. 5.5% of Meritage Homes shares are held by company insiders. Comparatively, 15.4% of shares of all “Operative builders” companies are held by company 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.
Risk & Volatility
Meritage Homes has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Meritage Homes’ competitors have a beta of 1.10, suggesting that their average stock price is 10% more volatile than the S&P 500.
Earnings and Valuation
This table compares Meritage Homes and its competitors top-line revenue, earnings per share and valuation.
|
Gross Revenue |
Net Income |
Price/Earnings Ratio |
| Meritage Homes |
$3.23 billion |
$143.25 million |
11.20 |
| Meritage Homes Competitors |
$4.18 billion |
$223.65 million |
13.75 |
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.
Summary
Meritage Homes beats its competitors on 7 of the 13 factors compared.
About Meritage Homes
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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