TRI Pointe Group (NYSE: TPH) and Toll Brothers (NYSE:TOL) are both mid-cap construction companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.
Earnings and Valuation
This table compares TRI Pointe Group and Toll Brothers’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TRI Pointe Group||$2.81 billion||0.88||$187.19 million||$1.23||13.33|
|Toll Brothers||$5.82 billion||1.16||$535.49 million||$3.60||12.24|
Toll Brothers has higher revenue and earnings than TRI Pointe Group. Toll Brothers is trading at a lower price-to-earnings ratio than TRI Pointe Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
TRI Pointe Group has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Toll Brothers has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.
Toll Brothers pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. TRI Pointe Group does not pay a dividend. Toll Brothers pays out 8.9% of its earnings in the form of a dividend.
This table compares TRI Pointe Group and Toll Brothers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TRI Pointe Group||6.66%||11.89%||5.86%|
This is a breakdown of recent ratings for TRI Pointe Group and Toll Brothers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TRI Pointe Group||0||2||6||0||2.75|
TRI Pointe Group presently has a consensus target price of $18.57, indicating a potential upside of 13.31%. Toll Brothers has a consensus target price of $50.29, indicating a potential upside of 14.16%. Given Toll Brothers’ higher possible upside, analysts clearly believe Toll Brothers is more favorable than TRI Pointe Group.
Institutional and Insider Ownership
86.0% of Toll Brothers shares are held by institutional investors. 2.2% of TRI Pointe Group shares are held by insiders. Comparatively, 9.0% of Toll Brothers shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Toll Brothers beats TRI Pointe Group on 11 of the 16 factors compared between the two stocks.
About TRI Pointe Group
TRI Pointe Group, Inc. is a homebuilder company. The Company’s operations are organized in two principal businesses, including homebuilding and financial services. Its homebuilding operation consists of six segments: Maracay Homes, including operations in Arizona; Pardee Homes, consisting of operations in California and Nevada; Quadrant Homes, consisting of operations in Washington; Trendmaker Homes, consisting of operations in Texas; TRI Pointe Homes, consisting of operations in California and Colorado, and Winchester Homes, consisting of operations in Maryland and Virginia. Its financial services operation (TRI Pointe Solutions) includes mortgage financing operations and title services operations. Its mortgage financing operation (TRI Pointe Connect) provides mortgage financing to its homebuyers in all of its operated markets. Its title services operation (TRI Pointe Assurance) provides title examinations for its homebuyers in its Trendmaker Homes and Winchester Homes brands.
About Toll Brothers
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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