LGI Homes (NASDAQ:LGIH) and Cyrela Brazil Realty (OTCMKTS:CYRBY) Critical Analysis

Cyrela Brazil Realty (OTCMKTS:CYRBY) and LGI Homes (NASDAQ:LGIH) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Institutional & Insider Ownership

84.9% of LGI Homes shares are owned by institutional investors. 12.3% of LGI Homes shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Cyrela Brazil Realty and LGI Homes”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cyrela Brazil Realty	$1.48 billion	1.51	$305.72 million	$0.88	6.60
LGI Homes	$1.79 billion	0.62	$196.07 million	$4.53	10.65

Cyrela Brazil Realty has higher earnings, but lower revenue than LGI Homes. Cyrela Brazil Realty is trading at a lower price-to-earnings ratio than LGI Homes, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for Cyrela Brazil Realty and LGI Homes, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cyrela Brazil Realty	0	0	0	0	0.00
LGI Homes	2	2	2	0	2.00

LGI Homes has a consensus price target of $72.13, indicating a potential upside of 49.54%. Given LGI Homes’ stronger consensus rating and higher possible upside, analysts plainly believe LGI Homes is more favorable than Cyrela Brazil Realty.

Profitability

This table compares Cyrela Brazil Realty and LGI Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cyrela Brazil Realty	21.07%	17.20%	7.84%
LGI Homes	5.93%	5.50%	2.88%

Volatility and Risk

Cyrela Brazil Realty has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, LGI Homes has a beta of 1.85, meaning that its share price is 85% more volatile than the S&P 500.

Summary

LGI Homes beats Cyrela Brazil Realty on 9 of the 14 factors compared between the two stocks.

About Cyrela Brazil Realty

Cyrela Brazil Realty S.A. Empreendimentos e Participações develops and constructs residential properties in Brazil. It also provides real estate services, such as construction management and technical consultancy services. The company was founded in 1962 and is headquartered in São Paulo, Brazil.

About LGI Homes

LGI Homes, Inc. designs, constructs, and sells homes. It offers entry-level homes, such as attached and detached homes, and active adult homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. The company also engages in the wholesale business, which include building and selling homes to large institutions looking to acquire single-family rental properties. It serves customers in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland, and Utah. LGI Homes, Inc. was founded in 2003 and is headquartered in The Woodlands, Texas.