Critical Analysis: Toll Brothers (TOL) & Ryland Group (RYL)
Toll Brothers (NYSE: TOL) and Ryland Group (NYSE:RYL) are both construction companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.
Earnings and Valuation
This table compares Toll Brothers and Ryland Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Toll Brothers||$5.64 billion||1.14||$534.39 million||$2.69||14.65|
Toll Brothers has higher revenue and earnings than Ryland Group.
This table compares Toll Brothers and Ryland Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Toll Brothers pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Ryland Group does not pay a dividend. Toll Brothers pays out 11.9% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and recommmendations for Toll Brothers and Ryland Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Toll Brothers presently has a consensus price target of $40.36, suggesting a potential upside of 2.39%. Given Toll Brothers’ higher possible upside, equities analysts clearly believe Toll Brothers is more favorable than Ryland Group.
Insider and Institutional Ownership
80.7% of Toll Brothers shares are owned by institutional investors. 8.8% of Toll Brothers shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Toll Brothers beats Ryland Group on 8 of the 11 factors compared between the two stocks.
About Toll Brothers
Toll Brothers, Inc. is engaged in designing, building, marketing, selling and arranging financing for detached and attached homes in luxury residential communities. The Company operates through two segments: Traditional Home Building and Toll Brothers City Living (City Living). Within the Traditional Home Building segment, it operates in five geographic segments in the United States: the North, consisting of Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York; the Mid-Atlantic, consisting of Delaware, Maryland, Pennsylvania and Virginia; the South, consisting of Florida, North Carolina and Texas; the West, consisting of Arizona, Colorado, Nevada and Washington, and California. City Living is the Company’s urban development division. Its products include Traditional Home Building Product and City Living Product. Its Traditional Home Building Product includes detached homes, move-up, executive, estate, and active-adult and age-qualified lines of home.
About Ryland Group
The Ryland Group, Inc. is a homebuilder and a mortgage-finance company. RMC Mortgage Corporation and its subsidiaries (RMCMC) and Ryland Mortgage Company provides mortgage financing and related services for more than 255,000 homebuyers. The Company consists of six reportable segments: four geographically determined homebuilding regions; financial services, and corporate. The Company’s business is conducted and located in the United States, and its operations span all aspects of the homebuying process from design, construction and sale to mortgage origination, title and escrow services. The Company generally builds homes for entry-level buyers and first and second-time move-up buyers. The financial services segment provides mortgage-related products and services, as well as title and escrow services, to its homebuyers. Corporate is a non-operating business segment, which is engaged in supporting operations.
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