Critical Comparison: M/I Homes (MHO) vs. M.D.C. Holdings (NYSE:MDC)
M/I Homes (NYSE: MHO) and M.D.C. Holdings (NYSE:MDC) are both small-cap construction companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitabiliy, earnings, analyst recommendations, valuation and risk.
Insider & Institutional Ownership
81.2% of M.D.C. Holdings shares are owned by institutional investors. 4.7% of M/I Homes shares are owned by insiders. Comparatively, 25.3% of M.D.C. Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for M/I Homes and M.D.C. Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
M/I Homes presently has a consensus price target of $32.00, suggesting a potential upside of 23.98%. M.D.C. Holdings has a consensus price target of $29.00, suggesting a potential downside of 16.09%. Given M/I Homes’ stronger consensus rating and higher probable upside, equities analysts clearly believe M/I Homes is more favorable than M.D.C. Holdings.
Risk and Volatility
M/I Homes has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, M.D.C. Holdings has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.
Valuation & Earnings
This table compares M/I Homes and M.D.C. Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|M/I Homes||$1.83 billion||0.35||$132.36 million||$2.12||12.17|
|M.D.C. Holdings||$2.58 billion||0.69||$199.46 million||$2.36||14.62|
M.D.C. Holdings has higher revenue and earnings than M/I Homes. M/I Homes is trading at a lower price-to-earnings ratio than M.D.C. Holdings, indicating that it is currently the more affordable of the two stocks.
This table compares M/I Homes and M.D.C. Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
M.D.C. Holdings beats M/I Homes on 9 of the 14 factors compared between the two stocks.
M/I Homes Company Profile
M/I Homes, Inc. is a builder of single-family homes. The Company consists of two operations: homebuilding and financial services. It operates through Midwest homebuilding, Southern homebuilding, Mid-Atlantic homebuilding and financial services operations segments. The Company and its subsidiaries are engaged primarily in the construction and sale of single-family residential homes in 15 markets: Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Tampa, Orlando and Sarasota, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and the Virginia and Maryland suburbs of Washington, D.C. The Company’s financial services operations support its homebuilding operations by providing mortgage loans and title services to the customers of its homebuilding operations. It markets and sells homes primarily under the M/I Homes brand (M/I Homes and Showcase Collection (by M/I)).
M.D.C. Holdings Company Profile
M.D.C. Holdings, Inc. is engaged in two primary operations, including homebuilding and financial services. The Company’s segments include West, including segments located in Arizona, California, Nevada and Washington; Mountain, including segments located in Colorado and Utah; East, including segments located in Virginia, Florida and Maryland, which includes Pennsylvania and New Jersey; mortgage operations, including HomeAmerican Mortgage Corporation, and Other, which includes Allegiant Insurance Company, Inc., StarAmerican Insurance Ltd., American Home Insurance Agency, Inc. and American Home Title and Escrow Company. The homebuilding operations consist of subsidiary companies that purchases finished lots or develop lots necessary for the construction and sale of single-family detached homes to first-time and first-time move-up homebuyers under the name Richmond American Homes. It also includes land acquisition and development, home construction, and sales and marketing.
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