PulteGroup (NYSE:PHM) versus Mohawk Industries (NYSE:MHK) Financial Review

PulteGroup (NYSE:PHM) and Mohawk Industries (NYSE:MHK) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Profitability

This table compares PulteGroup and Mohawk Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PulteGroup	11.62%	15.21%	10.89%
Mohawk Industries	4.15%	7.50%	4.60%

Insider and Institutional Ownership

89.9% of PulteGroup shares are held by institutional investors. Comparatively, 79.0% of Mohawk Industries shares are held by institutional investors. 0.7% of PulteGroup shares are held by insiders. Comparatively, 17.9% of Mohawk Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for PulteGroup and Mohawk Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PulteGroup	0	6	11	0	2.65
Mohawk Industries	0	12	3	1	2.31

PulteGroup currently has a consensus target price of $143.14, indicating a potential upside of 10.96%. Mohawk Industries has a consensus target price of $130.50, indicating a potential downside of 4.37%. Given PulteGroup’s stronger consensus rating and higher possible upside, equities research analysts plainly believe PulteGroup is more favorable than Mohawk Industries.

Risk & Volatility

PulteGroup has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Mohawk Industries has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Valuation and Earnings

This table compares PulteGroup and Mohawk Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PulteGroup	$17.31 billion	1.40	$2.22 billion	$9.79	13.18
Mohawk Industries	$11.18 billion	0.83	$369.90 million	$7.55	18.08

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

Summary

PulteGroup beats Mohawk Industries on 12 of the 15 factors compared between the two stocks.

About PulteGroup

PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West brand names. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was founded in 1950 and is headquartered in Atlanta, Georgia.

About Mohawk Industries

Mohawk Industries, Inc. designs, manufactures, sources, distributes, and markets flooring products for residential and commercial remodeling, and new construction channels in the United States, Europe, Latin America, and internationally. It operates through three segments: Global Ceramic, Flooring North America, and Flooring Rest of the World. The company provides ceramic, porcelain, and natural stone tiles products for floor and wall applications; natural stones, porcelain slabs, and quartz countertops, as well as installation materials; floor covering products comprising broadloom carpets, carpet tiles, rugs and mats, carpet pads, laminates, medium-density fiberboards, wood floorings, luxury vinyl tiles, and sheet vinyl; and roofing panels, insulation boards, mezzanine flooring products, medium-density fiberboard, and chipboards. It also licenses its intellectual property to flooring manufacturers. The company sells its products under the American Olean, Daltile, Decortiles, Eliane, EmilGroup, KAI, Kerama Marazzi, Marazzi, Ragno, Aladdin Commercial, Durkan, Foss, IVC, Karastan, Mohawk, Mohawk Group, Mohawk Home, Pergo, Portico, Quick-Step, Feltex, GH Commercial, Godfrey Hirst, Hycraft, IVC Commercial, IVC Home, Lentex, Leoline, and Moduleo, Redbook, Unilin, and Vitromex brands. It offers its products to company-owned service centers and stores, company-operated distributors, floor covering retailers, wholesalers, mass merchandisers, department stores, shop at home, buying groups, ceramic tile specialists, e-commerce retailers, residential builders, independent distributors, commercial contractors, and commercial end users. The company was incorporated in 1988 and is headquartered in Calhoun, Georgia.