Financial Contrast: Forestar Group (NYSE:FOR) versus United Homes Group (NASDAQ:UHG)

United Homes Group (NASDAQ:UHG) and Forestar Group (NYSE:FOR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for United Homes Group and Forestar Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Homes Group	1	0	0	0	1.00
Forestar Group	0	3	4	0	2.57

Forestar Group has a consensus price target of $32.00, suggesting a potential upside of 14.84%. Given Forestar Group’s stronger consensus rating and higher probable upside, analysts clearly believe Forestar Group is more favorable than United Homes Group.

Institutional & Insider Ownership

88.9% of United Homes Group shares are held by institutional investors. Comparatively, 35.5% of Forestar Group shares are held by institutional investors. 72.3% of United Homes Group shares are held by company insiders. Comparatively, 0.5% of Forestar Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares United Homes Group and Forestar Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Homes Group	$463.71 million	0.20	$46.91 million	($0.32)	-4.94
Forestar Group	$1.66 billion	0.85	$167.90 million	$3.29	8.47

Forestar Group has higher revenue and earnings than United Homes Group. United Homes Group is trading at a lower price-to-earnings ratio than Forestar Group, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

United Homes Group has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Forestar Group has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Profitability

This table compares United Homes Group and Forestar Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Homes Group	-4.49%	-37.81%	-9.88%
Forestar Group	10.11%	10.08%	5.52%

Summary

Forestar Group beats United Homes Group on 12 of the 14 factors compared between the two stocks.

About United Homes Group

United Homes Group, Inc., a homebuilding company, engages in the design, building, and sale of homes in South Carolina, North Carolina, and Georgia. It provides detached single-family houses, as well as attached single-family houses, including duplex and town houses for entry-level buyers, first time move-ups, second time move-ups, third time move-ups, and custom builds. The company was founded in 2004 and is headquartered in Chapin, South Carolina.

About Forestar Group

Forestar Group Inc. operates as a residential lot development company in the United States. The company acquires land and develops infrastructure for single-family residential communities. It sells its residential single-family finished lots to local, regional, and national homebuilders. The company was incorporated in 2005 and is headquartered in Arlington, Texas. Forestar Group Inc. operates as a subsidiary of D.R. Horton, Inc.