Critical Review: PulteGroup (NYSE:PHM) & Hovnanian Enterprises, Inc. PFD DEP1/1000A (NASDAQ:HOVNP)

PulteGroup (NYSE:PHM) and Hovnanian Enterprises, Inc. PFD DEP1/1000A (NASDAQ:HOVNP) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

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

Profitability

This table compares PulteGroup and Hovnanian Enterprises, Inc. PFD DEP1/1000A’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PulteGroup	11.62%	15.21%	10.89%
Hovnanian Enterprises, Inc. PFD DEP1/1000A	N/A	N/A	N/A

Dividends

PulteGroup pays an annual dividend of $1.04 per share and has a dividend yield of 0.8%. Hovnanian Enterprises, Inc. PFD DEP1/1000A pays an annual dividend of $1.91 per share and has a dividend yield of 9.7%. PulteGroup pays out 10.6% of its earnings in the form of a dividend. PulteGroup has increased its dividend for 7 consecutive years.

Earnings and Valuation

This table compares PulteGroup and Hovnanian Enterprises, Inc. PFD DEP1/1000A”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PulteGroup	$17.31 billion	1.44	$2.22 billion	$9.79	13.57
Hovnanian Enterprises, Inc. PFD DEP1/1000A	$2.92 billion	N/A	N/A	N/A	N/A

PulteGroup has higher revenue and earnings than Hovnanian Enterprises, Inc. PFD DEP1/1000A.

Analyst Ratings

This is a summary of current recommendations and price targets for PulteGroup and Hovnanian Enterprises, Inc. PFD DEP1/1000A, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PulteGroup	0	7	10	0	2.59
Hovnanian Enterprises, Inc. PFD DEP1/1000A	0	0	0	0	0.00

PulteGroup currently has a consensus target price of $143.14, suggesting a potential upside of 7.73%. Given PulteGroup’s stronger consensus rating and higher possible upside, research analysts clearly believe PulteGroup is more favorable than Hovnanian Enterprises, Inc. PFD DEP1/1000A.

Summary

PulteGroup beats Hovnanian Enterprises, Inc. PFD DEP1/1000A on 10 of the 12 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 Hovnanian Enterprises, Inc. PFD DEP1/1000A

for a complete listing of all our available career opportunities, please visit khov.com/careers. hovnanian enterprises, inc., founded in 1959 by kevork s. hovnanian, is headquartered in red bank, new jersey. the company is one of the nation’s largest homebuilders with operations in arizona, california, delaware, florida, georgia, illinois, maryland, new jersey, ohio, pennsylvania, south carolina, texas, virginia, washington, d.c. and west virginia. hovnanian is highly diversified by product type, selling a wide array of attached and detached home styles to buyers ranging from first-time purchasers to luxury buyers. as the developer of k. hovnanian’s® four seasons communities, the company is also one of the nation’s largest builders of active lifestyle communities. the company’s homes are marketed and sold under the trade names k. hovnanian® homes, brighton homes® and parkwood builders.