Head to Head Review: D.R. Horton (NYSE:DHI) and Sonos (NASDAQ:SONO)

Sonos (NASDAQ:SONO) and D.R. Horton (NYSE:DHI) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Valuation and Earnings

This table compares Sonos and D.R. Horton”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sonos	$1.49 billion	1.20	-$61.14 million	$0.45	33.60
D.R. Horton	$34.25 billion	1.13	$3.59 billion	$10.51	13.13

D.R. Horton has higher revenue and earnings than Sonos. D.R. Horton is trading at a lower price-to-earnings ratio than Sonos, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Sonos and D.R. Horton, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonos	0	3	2	0	2.40
D.R. Horton	0	10	5	0	2.33

Sonos currently has a consensus price target of $20.00, suggesting a potential upside of 32.28%. D.R. Horton has a consensus price target of $166.08, suggesting a potential upside of 20.34%. Given Sonos’ stronger consensus rating and higher possible upside, equities analysts plainly believe Sonos is more favorable than D.R. Horton.

Risk & Volatility

Sonos has a beta of 1.93, meaning that its stock price is 93% more volatile than the S&P 500. Comparatively, D.R. Horton has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Insider and Institutional Ownership

85.8% of Sonos shares are held by institutional investors. Comparatively, 90.6% of D.R. Horton shares are held by institutional investors. 1.3% of Sonos shares are held by company insiders. Comparatively, 0.7% of D.R. Horton shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Sonos and D.R. Horton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonos	3.82%	19.10%	8.67%
D.R. Horton	9.15%	12.47%	8.59%

Summary

Sonos beats D.R. Horton on 8 of the 14 factors compared between the two stocks.

About Sonos

Sonos, Inc., together with its subsidiaries, designs, develops, manufactures, and sells audio products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers wireless, portable, and home theater speakers; components; and accessories. The company offers its products through approximately 10,000 third-party retail stores, including custom installers of home audio systems; and e-commerce retailers, as well as through its website. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was incorporated in 2002 and is headquartered in Santa Barbara, California.

About D.R. Horton

D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as townhomes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; and owns non-residential real estate, including ranch land and improvements. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.