Hovnanian Enterprises (NYSE:HOV) & Aterian (NASDAQ:ATER) Head-To-Head Review

Aterian (NASDAQ:ATER) and Hovnanian Enterprises (NYSE:HOV) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Earnings & Valuation

This table compares Aterian and Hovnanian Enterprises”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aterian	$68.85 million	0.13	-$18.98 million	($1.99)	-0.45
Hovnanian Enterprises	$2.82 billion	0.20	$63.87 million	$0.95	101.17

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

Profitability

This table compares Aterian and Hovnanian Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aterian	-49.30%	-92.04%	-47.83%
Hovnanian Enterprises	0.64%	8.64%	2.17%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Aterian and Hovnanian Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aterian	1	0	0	0	1.00
Hovnanian Enterprises	2	1	0	0	1.33

Hovnanian Enterprises has a consensus price target of $74.00, indicating a potential downside of 23.00%. Given Hovnanian Enterprises’ stronger consensus rating and higher probable upside, analysts plainly believe Hovnanian Enterprises is more favorable than Aterian.

Volatility & Risk

Aterian has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Hovnanian Enterprises has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500.

Insider and Institutional Ownership

7.0% of Aterian shares are owned by institutional investors. Comparatively, 65.4% of Hovnanian Enterprises shares are owned by institutional investors. 19.5% of Aterian shares are owned by insiders. Comparatively, 22.7% of Hovnanian Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Hovnanian Enterprises beats Aterian on 13 of the 13 factors compared between the two stocks.

About Aterian

Aterian, Inc. (NASDAQ: ATER) is a technology-enabled consumer products company that develops, acquires and sells products through online retail channels. Its portfolio has included household, kitchen, health and wellness, beauty, outdoor and other consumer-focused products marketed under a range of brands. The company uses data analytics, software and automation to identify product opportunities, manage sourcing and manufacturing, optimize marketing, and support sales and inventory decisions. Aterian distributes its products primarily through third-party e-commerce marketplaces, including Amazon and Walmart, as well as through company-operated websites and other online channels.

About Hovnanian Enterprises

Hovnanian Enterprises, Inc. is a U.S. homebuilding company that develops and sells new homes and residential communities. Its offerings include single-family detached homes, townhomes and homes in active-adult communities, with designs and features tailored to different buyer needs and price ranges. The company operates under the K. Hovnanian Homes name and serves markets across several regions of the United States, including the Northeast, Mid-Atlantic, Southeast, Midwest and Southwest. Through affiliated businesses, it also provides services such as mortgage financing and title services to homebuyers.