Critical Review: Legacy Housing (NASDAQ:LEGH) versus FirstService (NASDAQ:FSV)

Legacy Housing (NASDAQ:LEGH) and FirstService (NASDAQ:FSV) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Volatility & Risk

Legacy Housing has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, FirstService has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Earnings and Valuation

This table compares Legacy Housing and FirstService”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Legacy Housing	$184.19 million	2.69	$61.64 million	$1.95	10.63
FirstService	$5.22 billion	1.35	$134.38 million	$3.02	51.17

FirstService has higher revenue and earnings than Legacy Housing. Legacy Housing is trading at a lower price-to-earnings ratio than FirstService, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Legacy Housing and FirstService’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Legacy Housing	26.66%	9.47%	8.80%
FirstService	2.53%	17.98%	5.21%

Institutional and Insider Ownership

89.4% of Legacy Housing shares are owned by institutional investors. Comparatively, 69.4% of FirstService shares are owned by institutional investors. 30.1% of Legacy Housing shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Legacy Housing and FirstService, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Legacy Housing	1	3	0	0	1.75
FirstService	0	2	6	0	2.75

Legacy Housing presently has a consensus price target of $21.00, suggesting a potential upside of 1.35%. FirstService has a consensus price target of $211.83, suggesting a potential upside of 37.07%. Given FirstService’s stronger consensus rating and higher possible upside, analysts plainly believe FirstService is more favorable than Legacy Housing.

Summary

FirstService beats Legacy Housing on 9 of the 14 factors compared between the two stocks.

About Legacy Housing

Legacy Housing Corporation engages in the building, sale, and financing of manufactured homes and tiny houses primarily in the southern United States. It manufactures and provides for the transport of mobile homes, including 1 to 5 bedrooms with 1 to 3 1/2 bathrooms; and provides wholesale financing to dealers and mobile home parks, as well as retail financing to consumers. The company also offers inventory financing for its independent retailers; consumer financing for its products; and financing to manufactured housing community owners that buy or lease its products for use in their rental housing communities. In addition, it involved in financing and developing new manufactured home communities. The company markets its homes under the Legacy brand through a network of independent retailers and company-owned stores; and directly to manufactured home communities. Legacy Housing Corporation was founded in 2005 and is headquartered in Bedford, Texas.

About FirstService

FirstService Corporation, together with its subsidiaries, provides residential property management and other essential property services to residential and commercial customers in the United States and Canada. It operates through two segments: FirstService Residential and FirstService Brands. The FirstService Residential segment offers services for private residential communities, such as condominiums, co-operatives, homeowner associations, master-planned communities, active adult and lifestyle communities, and various other residential developments. This segment provides a range of ancillary services, including on-site staffing for building engineering and maintenance, full-service amenity management, and security and concierge/front desk; and financial services comprising cash management, other banking transaction-related, and specialized property insurance brokerage. In addition, this segment offers energy management solutions and advisory services, and resale processing services. Its FirstService Brands segment operates and provides essential property services to residential and commercial customers through franchise networks; and company-owned operations, including California Closets, Paul Davis Restoration, and CertaPro Painters operations. It provides residential and commercial restoration, painting, and floor coverings design and installation services; custom-designed and installed closet, and home storage solutions; home inspection services; and fire protection and related services. This segment offers its services primarily under the Paul Davis Restoration, Roofing Corp of America, First Onsite property Restoration, Century Fire Protection, CertaPro Painters, California Closets, Pillar to Post Home Inspectors, and Floor Coverings International brand names. FirstService Corporation was incorporated in 1988 and is headquartered in Toronto, Canada.