Analyzing Lennar Corporation (LEN) and M/I Homes (NYSE:MHO)

Lennar Corporation (NYSE: LEN) and M/I Homes (NYSE:MHO) are both construction companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitabiliy, institutional ownership, analyst recommendations, valuation, dividends and risk.

Risk & Volatility

Lennar Corporation has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, M/I Homes has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.

Institutional and Insider Ownership

82.1% of Lennar Corporation shares are held by institutional investors. 12.2% of Lennar Corporation shares are held by insiders. Comparatively, 4.7% of M/I Homes 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.

Earnings and Valuation

This table compares Lennar Corporation and M/I Homes’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Lennar Corporation	$11.81 billion	0.93	$1.36 billion	$3.42	15.86
M/I Homes	$1.83 billion	0.35	$132.36 million	$2.12	12.17

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

Profitability

This table compares Lennar Corporation and M/I Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar Corporation	6.78%	12.57%	5.69%
M/I Homes	3.57%	12.99%	5.11%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Lennar Corporation and M/I Homes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar Corporation	0	8	9	1	2.61
M/I Homes	0	1	2	0	2.67

Lennar Corporation currently has a consensus price target of $56.31, suggesting a potential upside of 3.80%. M/I Homes has a consensus price target of $32.00, suggesting a potential upside of 23.98%. Given M/I Homes’ stronger consensus rating and higher possible upside, analysts plainly believe M/I Homes is more favorable than Lennar Corporation.

Dividends

Lennar Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.3%. M/I Homes does not pay a dividend. Lennar Corporation pays out 4.7% of its earnings in the form of a dividend.

Summary

Lennar Corporation beats M/I Homes on 13 of the 17 factors compared between the two stocks.

About Lennar Corporation

Lennar Corporation is a provider of real estate related financial services, commercial real estate, investment management and finance company. The Company is a homebuilder that operates in various states. Its segments include Homebuilding East, Homebuilding Central, Homebuilding West, Lennar Financial Services, Rialto and Lennar Multifamily. It is a developer of multifamily rental properties. Its 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. It operates primarily under the Lennar brand name. The Lennar Financial Services segment includes mortgage financing, title insurance and closing services for both buyers of its homes and others. The Rialto segment is a real estate, investment management, and finance company. The Lennar Multifamily segment focuses on developing a portfolio of institutional multifamily rental properties in the United States markets.

About M/I Homes

M/I Homes, Inc. is a builder of single-family homes. The Company consists of two operations: homebuilding and financial services. It operates through Midwest homebuilding, Southern homebuilding, Mid-Atlantic homebuilding and financial services operations segments. The Company and its subsidiaries are engaged primarily in the construction and sale of single-family residential homes in 15 markets: Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Tampa, Orlando and Sarasota, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and the Virginia and Maryland suburbs of Washington, D.C. The Company’s financial services operations support its homebuilding operations by providing mortgage loans and title services to the customers of its homebuilding operations. It markets and sells homes primarily under the M/I Homes brand (M/I Homes and Showcase Collection (by M/I)).