Kennedy-Wilson Holdings (NYSE: KW) and Nationstar Mortgage Holdings (NYSE:NSM) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Profitability

This table compares Kennedy-Wilson Holdings and Nationstar Mortgage Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kennedy-Wilson Holdings 1.94% 2.04% 0.60%
Nationstar Mortgage Holdings 9.34% 8.88% 0.80%

Risk & Volatility

Kennedy-Wilson Holdings has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Nationstar Mortgage Holdings has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Dividends

Kennedy-Wilson Holdings pays an annual dividend of $0.68 per share and has a dividend yield of 3.6%. Nationstar Mortgage Holdings does not pay a dividend. Kennedy-Wilson Holdings pays out 523.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kennedy-Wilson Holdings has increased its dividend for 6 consecutive years.

Valuation and Earnings

This table compares Kennedy-Wilson Holdings and Nationstar Mortgage Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Kennedy-Wilson Holdings $703.40 million 4.02 $5.59 million $0.13 143.47
Nationstar Mortgage Holdings $1.93 billion 0.84 $19.00 million $1.90 8.72

Nationstar Mortgage Holdings has higher revenue and earnings than Kennedy-Wilson Holdings. Nationstar Mortgage Holdings is trading at a lower price-to-earnings ratio than Kennedy-Wilson Holdings, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

86.7% of Kennedy-Wilson Holdings shares are held by institutional investors. Comparatively, 97.9% of Nationstar Mortgage Holdings shares are held by institutional investors. 17.1% of Kennedy-Wilson Holdings shares are held by company insiders. Comparatively, 0.8% of Nationstar Mortgage Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Kennedy-Wilson Holdings and Nationstar Mortgage Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kennedy-Wilson Holdings 0 2 2 0 2.50
Nationstar Mortgage Holdings 2 3 5 0 2.30

Kennedy-Wilson Holdings currently has a consensus target price of $28.33, indicating a potential upside of 51.92%. Nationstar Mortgage Holdings has a consensus target price of $18.33, indicating a potential upside of 10.64%. Given Kennedy-Wilson Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe Kennedy-Wilson Holdings is more favorable than Nationstar Mortgage Holdings.

Summary

Nationstar Mortgage Holdings beats Kennedy-Wilson Holdings on 10 of the 17 factors compared between the two stocks.

Kennedy-Wilson Holdings Company Profile

Kennedy-Wilson Holdings, Inc. is a real estate investment company. The Company owns, operates, and invests in real estate both on its own and through its investment management platform. The Company focuses on multifamily and commercial properties located in the Western United States, the United Kingdom, Ireland, Spain, Italy and Japan. The Company’s segments include KW Investments, and KW Investment Management and Real Estate Services (IMRES). KW Investments invests in multifamily, residential and commercial properties, as well as loans secured by real estate. IMRES provides real estate-related services to investors and lenders, with a focus on financial institution-based clients. As of December 31, 2016, the Company had an ownership interest in approximately 39 million square feet of property globally, including 25,943 multifamily rental units.

Nationstar Mortgage Holdings Company Profile

Nationstar Mortgage Holdings Inc. provides servicing, origination and transaction based services principally to single-family residences throughout the United States. The Company operates through three segments: Servicing, Originations and Xome. The Company provides residential loan services in the United States. The Company also operates an integrated residential loan origination platform that is primarily focused on customer retention. Its Xome subsidiary offers an array of complementary services related to the purchase and disposition of residential real estate. It provides non-bank services and residential mortgage services in the United States conducting operations through its Nationstar Mortgage and Champion Mortgage brands. It originates and purchases conventional mortgage loans conforming to the underwriting standards of the government sponsored entities, which it collectively refers to as Agency loans. The Xome segment is a provider of technology and data-enhanced solutions.

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