Critical Analysis: Lennar (NYSE:LEN.B) vs. Persimmon (OTCMKTS:PSMMY)

Lennar (NYSE:LEN.B) and Persimmon (OTCMKTS:PSMMY) are both construction companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Risk and Volatility

Lennar has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Persimmon has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Lennar and Persimmon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	0	0	0	0	0.00
Persimmon	0	0	4	1	3.20

Dividends

Lennar pays an annual dividend of $2.00 per share and has a dividend yield of 1.8%. Persimmon pays an annual dividend of $0.91 per share and has a dividend yield of 2.6%. Lennar pays out 16.5% of its earnings in the form of a dividend.

Profitability

This table compares Lennar and Persimmon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	7.72%	11.09%	7.34%
Persimmon	N/A	N/A	N/A

Institutional & Insider Ownership

3.3% of Lennar shares are owned by institutional investors. 15.0% of Lennar shares are owned by company insiders. Comparatively, 0.6% of Persimmon shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Lennar and Persimmon”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennar	$35.44 billion	0.81	$3.93 billion	$12.09	9.34
Persimmon	$4.09 billion	1.38	$341.33 million	N/A	N/A

Lennar has higher revenue and earnings than Persimmon.

Summary

Lennar beats Persimmon on 8 of the 14 factors compared between the two stocks.

About Lennar

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company's 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 primarily sells single-family attached and detached homes in communities targeted to first-time, move-up, active adult, and luxury homebuyers. The company also offers residential mortgage financing, title insurance, and closing services for home buyers and others. In addition, it involves in the fund investment activity; and originates and sells into securitizations commercial mortgage loans. Further, the company develops, constructs, and manages multifamily rental properties. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

About Persimmon

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services under the FibreNest brand; and timber frame, insulated wall panels, and roof cassettes under the brand Space4. Further, it offers concrete bricks and roof tile. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.