Head to Head Survey: Dorel Industries (OTCMKTS:DIIBF) & Lennar (NYSE:LEN)

Lennar (NYSE:LEN) and Dorel Industries (OTCMKTS:DIIBF) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Volatility & Risk

Lennar has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, Dorel Industries has a beta of 1.58, indicating that its stock price is 58% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Lennar and Dorel Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	10	7	1	0	1.50
Dorel Industries	0	1	0	0	2.00

Lennar currently has a consensus target price of $92.13, suggesting a potential upside of 5.49%. Given Lennar’s higher possible upside, equities analysts clearly believe Lennar is more favorable than Dorel Industries.

Insider & Institutional Ownership

81.1% of Lennar shares are owned by institutional investors. 10.1% of Lennar shares are owned by insiders. Comparatively, 19.3% of Dorel Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Lennar pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. Dorel Industries pays an annual dividend of $0.60 per share and has a dividend yield of 51.0%. Lennar pays out 31.3% of its earnings in the form of a dividend. Dorel Industries pays out -14.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lennar has increased its dividend for 1 consecutive years. Dorel Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Lennar and Dorel Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennar	$34.19 billion	0.62	$2.08 billion	$6.39	13.67
Dorel Industries	$1.19 billion	0.03	-$142.22 million	($4.16)	-0.28

Lennar has higher revenue and earnings than Dorel Industries. Dorel Industries is trading at a lower price-to-earnings ratio than Lennar, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lennar and Dorel Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	4.93%	7.08%	4.61%
Dorel Industries	-12.73%	N/A	-11.58%

Summary

Lennar beats Dorel Industries on 12 of the 17 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; and development, construction, and management of multifamily rental properties. It also offers residential mortgage financing, title, insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans. In addition, the company is involved in the fund investment activity. It primarily serves first-time, move-up, active adult, and luxury homebuyers. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

About Dorel Industries

Dorel Industries Inc. engages in the design, manufacture, sourcing, marketing, and distribution of home and juvenile products worldwide. The company operates through Dorel Home and Dorel Juvenile segments. The Dorel Home segment offers ready-to assemble furniture and home furnishings products, including metal folding furniture, futons, children's furniture, step stools, hand trucks, ladders, outdoor furniture, and other imported furniture items. This segment markets its products under the DHP, Signature Sleep, Little Seeds, Ameriwood Home, Cosco Home & Office, Queer Eye, Cosmo Living, Novogratz, Real Rooms, Mr. Kate, Baby Relax, Alphason, Bertini, Ntense, and Notio brands. The Dorel Juvenile segment provides children's accessories comprising infant car seats, strollers, home equipment, toys, infant health, and safety aids under the Maxi-Cosi, Tiny Love, Infanti, Safety 1st, Bébé Confort, Quinny, and Cosco brands. The company was formerly known as Dorel Co. Ltd. and changed its name to Dorel Industries Inc. in May 1987. Dorel Industries Inc. was incorporated in 1962 and is headquartered in Westmount, Canada.