Lennar (NYSE: LEN) and Installed Building Products (NYSE:IBP) are both construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, risk, valuation, profitability and earnings.
Risk and Volatility
Lennar has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Installed Building Products has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.
Lennar pays an annual dividend of $0.16 per share and has a dividend yield of 0.3%. Installed Building Products does not pay a dividend. Lennar pays out 4.2% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares Lennar and Installed Building Products’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lennar||$12.65 billion||1.12||$810.48 million||$3.81||15.47|
|Installed Building Products||$1.13 billion||1.69||$41.14 million||$1.19||50.46|
Lennar has higher revenue and earnings than Installed Building Products. Lennar is trading at a lower price-to-earnings ratio than Installed Building Products, indicating that it is currently the more affordable of the two stocks.
This table compares Lennar and Installed Building Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Installed Building Products||3.63%||19.75%||5.45%|
This is a breakdown of recent recommendations and price targets for Lennar and Installed Building Products, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Installed Building Products||0||2||9||0||2.82|
Lennar presently has a consensus price target of $67.93, suggesting a potential upside of 15.25%. Installed Building Products has a consensus price target of $70.89, suggesting a potential upside of 18.05%. Given Installed Building Products’ stronger consensus rating and higher possible upside, analysts plainly believe Installed Building Products is more favorable than Lennar.
Insider & Institutional Ownership
88.7% of Lennar shares are owned by institutional investors. Comparatively, 68.3% of Installed Building Products shares are owned by institutional investors. 8.5% of Lennar shares are owned by company insiders. Comparatively, 32.9% of Installed Building Products shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Lennar Company Profile
Lennar Corporation is a provider of real estate related financial services, commercial real estate, investment management and finance company. The Company is a homebuilder that operates in various states. Its segments include Homebuilding East, Homebuilding Central, Homebuilding West, Lennar Financial Services, Rialto and Lennar Multifamily. It is a developer of multifamily rental properties. Its Homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development and sale of residential land. It operates primarily under the Lennar brand name. The Lennar Financial Services segment includes mortgage financing, title insurance and closing services for both buyers of its homes and others. The Rialto segment is a real estate, investment management, and finance company. The Lennar Multifamily segment focuses on developing a portfolio of institutional multifamily rental properties in the United States markets.
Installed Building Products Company Profile
Installed Building Products, Inc. is a holding company. The Company is a residential insulation installer in the United States. As of December 31, 2016, the Company’s national platform included over 100 locations accessing customers in 48 continental states and the District of Columbia. The Company also installs complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, which provides cross-selling opportunities to supplement the insulation installation business. The Company manages various aspects of the installation process for the customers, from the direct purchase and receipt of materials from national manufacturers, to supply of materials to job sites and quality installation. The Company’s customers include production and custom homebuilders, multi-family and commercial contractors, and homeowners.
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