One Liberty Properties (OLP) versus LGI Homes (LGIH) Critical Contrast

One Liberty Properties (NYSE: OLP) and LGI Homes (NASDAQ:LGIH) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

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This table compares One Liberty Properties and LGI Homes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
One Liberty Properties 31.81% 8.20% 3.27%
LGI Homes 9.01% 26.41% 11.61%

Analyst Recommendations

This is a summary of recent recommendations for One Liberty Properties and LGI Homes, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
One Liberty Properties 0 3 0 0 2.00
LGI Homes 0 2 3 0 2.60

One Liberty Properties presently has a consensus price target of $25.13, suggesting a potential upside of 13.69%. LGI Homes has a consensus price target of $55.60, suggesting a potential downside of 21.21%. Given One Liberty Properties’ higher probable upside, equities analysts plainly believe One Liberty Properties is more favorable than LGI Homes.

Risk and Volatility

One Liberty Properties has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, LGI Homes has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500.

Valuation & Earnings

This table compares One Liberty Properties and LGI Homes’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
One Liberty Properties $75.92 million 5.53 $24.14 million $2.09 10.57
LGI Homes $1.26 billion 1.25 $113.30 million $4.73 14.92

LGI Homes has higher revenue and earnings than One Liberty Properties. One Liberty Properties is trading at a lower price-to-earnings ratio than LGI Homes, indicating that it is currently the more affordable of the two stocks.

Dividends

One Liberty Properties pays an annual dividend of $1.80 per share and has a dividend yield of 8.1%. LGI Homes does not pay a dividend. One Liberty Properties pays out 86.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. One Liberty Properties has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

42.1% of One Liberty Properties shares are owned by institutional investors. Comparatively, 84.8% of LGI Homes shares are owned by institutional investors. 8.6% of One Liberty Properties shares are owned by company insiders. Comparatively, 13.6% of LGI Homes shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

LGI Homes beats One Liberty Properties on 11 of the 17 factors compared between the two stocks.

About One Liberty Properties

One Liberty Properties, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company acquires, owns and manages a geographically diversified portfolio consisting of retail, industrial, flex, and health and fitness properties. As of December 31, 2016, the Company owned 114 properties and participated in joint ventures that own five properties. These 119 properties are located in 30 states and have an aggregate of approximately 10.1 million square feet (including an aggregate of approximately 1.2 million square feet at properties owned by its joint ventures). As of December 31, 2016, the Company’s property locations included Fort Mill, South Carolina; Royersford, Pennsylvania; Round Rock, Texas; W.Hartford, Connecticut; Delport, Missouri; Brooklyn, New York City; Lakemoor, Illinois; Tucker, Georgia; Cedar Park, Texas; Lake Charles, Louisiana; Sandy Springs, Georgia; Wichita, Kansas; Melville, New York; Ronkonkoma, New York, and Niles, Illinois.

About LGI Homes

LGI Homes, Inc. is a homebuilder and land developer. The Company is engaged in the design, construction, marketing and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington and Tennessee. The Company operates through five segments: the Texas division, the Southwest division, the Southeast division, the Florida division and the Northwest division. The Texas division includes homebuilding operations in Houston, Dallas/Fort Worth, San Antonio and Austin locations. The Southwest division includes homebuilding operations in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs locations. The Southeast division includes homebuilding operations in Atlanta, Charlotte and Nashville locations. The Florida division includes homebuilding operations in Tampa, Orlando, Fort Myers and Jacksonville locations. The Northwest division includes homebuilding operations in Seattle location.

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