Head to Head Survey: New Home (NWHM) and M/I Homes (MHO)

New Home (NYSE: NWHM) and M/I Homes (NYSE:MHO) are both small-cap construction companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Volatility and Risk

New Home has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500. Comparatively, M/I Homes has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Earnings & Valuation

This table compares New Home and M/I Homes’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Home $751.17 million 0.28 $17.15 million $0.97 10.27
M/I Homes $1.96 billion 0.38 $72.08 million $2.88 9.05

M/I Homes has higher revenue and earnings than New Home. M/I Homes is trading at a lower price-to-earnings ratio than New Home, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares New Home and M/I Homes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Home 2.09% 7.69% 3.09%
M/I Homes 3.56% 12.38% 5.01%

Institutional and Insider Ownership

58.9% of New Home shares are owned by institutional investors. Comparatively, 95.9% of M/I Homes shares are owned by institutional investors. 24.6% of New Home shares are owned by insiders. Comparatively, 3.9% of M/I Homes shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for New Home and M/I Homes, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Home 0 3 0 0 2.00
M/I Homes 0 0 2 0 3.00

New Home currently has a consensus target price of $13.00, indicating a potential upside of 30.52%. M/I Homes has a consensus target price of $39.50, indicating a potential upside of 51.57%. Given M/I Homes’ stronger consensus rating and higher probable upside, analysts clearly believe M/I Homes is more favorable than New Home.

Summary

M/I Homes beats New Home on 11 of the 14 factors compared between the two stocks.

New Home Company Profile

The New Home Company Inc., a homebuilder, focuses on the design, construction, and sale of homes. The company operates in two segments, Homebuilding and Fee Building. It builds and sells homes in metropolitan areas of California and Arizona, including coastal Southern California, the San Francisco Bay area, metro Sacramento, and the greater Phoenix area. The company also offers general contracting services to build homes for independent third-party property owners. The New Home Company Inc. was founded in 2009 and is headquartered in Aliso Viejo, California.

M/I Homes Company Profile

M/I Homes, Inc., together with its subsidiaries, operates as a builder of single-family homes in Ohio, Indiana, Illinois, Minnesota, Maryland, Virginia, North Carolina, Florida, and Texas, the United States. The company operates through Midwest Homebuilding, Southern Homebuilding, Mid-Atlantic Homebuilding, and Financial Services segments. It designs, constructs, markets, and sells single-family homes and attached townhomes to first-time, move-up, empty-nester, and luxury buyers under the M/I Homes and Showcase Collection brand names. The company also purchases undeveloped land to develop into developed lots for the construction of single-family homes, as well as for sale to others. In addition, it originates and sells mortgages; and serves as a title insurance agent by providing title insurance policies, examination, and closing services to purchasers of its homes. The company was formerly known as M/I Schottenstein Homes, Inc. and changed its name to M/I Homes, Inc. in January 2004. M/I Homes, Inc. was incorporated in 1973 and is based in Columbus, Ohio.

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