TRI Pointe Group (NYSE: TPH) and NVR (NYSE:NVR) are both mid-cap construction companies, but which is the better stock? We will compare the two companies based on the strength of their profitabiliy, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for TRI Pointe Group and NVR, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TRI Pointe Group 1 3 4 0 2.38
NVR 0 4 1 0 2.20

TRI Pointe Group currently has a consensus price target of $14.29, indicating a potential upside of 1.46%. NVR has a consensus price target of $2,645.00, indicating a potential downside of 1.07%. Given TRI Pointe Group’s stronger consensus rating and higher possible upside, research analysts clearly believe TRI Pointe Group is more favorable than NVR.

Risk and Volatility

TRI Pointe Group has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500. Comparatively, NVR has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Insider and Institutional Ownership

98.7% of TRI Pointe Group shares are owned by institutional investors. Comparatively, 78.8% of NVR shares are owned by institutional investors. 9.4% of TRI Pointe Group shares are owned by insiders. Comparatively, 11.3% of NVR shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares TRI Pointe Group and NVR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TRI Pointe Group 7.38% 9.60% 5.00%
NVR 8.67% 37.43% 18.93%

Valuation and Earnings

This table compares TRI Pointe Group and NVR’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TRI Pointe Group $2.37 billion 0.94 $274.63 million $1.09 12.92
NVR $6.12 billion 1.64 $799.97 million $126.57 21.12

NVR has higher revenue and earnings than TRI Pointe Group. TRI Pointe Group is trading at a lower price-to-earnings ratio than NVR, indicating that it is currently the more affordable of the two stocks.

Summary

NVR beats TRI Pointe Group on 9 of the 14 factors compared between the two stocks.

TRI Pointe Group Company Profile

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.

NVR Company Profile

NVR, Inc. is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings. The Company’s segments are Homebuilding Mid Atlantic, Homebuilding North East, Homebuilding Mid East, Homebuilding South East and Mortgage Banking. Its Homebuilding Mid Atlantic segment operates in various geographic regions, which include Maryland, Virginia, West Virginia, Delaware and Washington, District of Columbia (D.C.). Its Homebuilding North East segment operates in various geographic regions, which include New Jersey and Eastern Pennsylvania. Its Homebuilding Mid East segment operates in various geographic regions, which include New York, Ohio, Indiana and Illinois, The Homebuilding South East segment operates in various geographic regions, which include North Carolina, South Carolina, Florida and Tennessee. The Mortgage Banking segment provides mortgage-related services to home building customers through its mortgage banking operations.

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