LGI Homes (NASDAQ: LGIH) and Century Communities (NYSE:CCS) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
Insider & Institutional Ownership
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90.0% of LGI Homes shares are held by institutional investors. Comparatively, 78.9% of Century Communities shares are held by institutional investors. 13.6% of LGI Homes shares are held by insiders. Comparatively, 13.9% of Century Communities shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a summary of recent ratings for LGI Homes and Century Communities, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
LGI Homes presently has a consensus price target of $61.25, indicating a potential upside of 3.69%. Century Communities has a consensus price target of $36.92, indicating a potential upside of 17.38%. Given Century Communities’ stronger consensus rating and higher probable upside, analysts clearly believe Century Communities is more favorable than LGI Homes.
Volatility & Risk
LGI Homes has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500. Comparatively, Century Communities has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.
This table compares LGI Homes and Century Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares LGI Homes and Century Communities’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|LGI Homes||$1.26 billion||1.06||$113.30 million||$4.73||12.49|
|Century Communities||$1.41 billion||0.66||$50.29 million||$2.87||10.96|
LGI Homes has higher earnings, but lower revenue than Century Communities. Century Communities is trading at a lower price-to-earnings ratio than LGI Homes, indicating that it is currently the more affordable of the two stocks.
LGI Homes beats Century Communities on 8 of the 14 factors compared between the two stocks.
LGI Homes Company Profile
LGI Homes, Inc. engages in the design, construction, and sale of new homes in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington, Tennessee, and Minnesota markets. It offers entry-level homes, such as detached and townhomes, as well as move-up homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. As of December 31, 2017, it owned 72 communities under the LGI Homes brand; and 6 under the Terrata Homes brand. LGI Homes, Inc. was founded in 2003 and is headquartered in The Woodlands, Texas.
Century Communities Company Profile
Century Communities, Inc. engages in the development, design, construction, marketing, and sale of single-family attached and detached homes in metropolitan areas in California, Colorado, Georgia, Nevada, North Carolina, South Carolina, Tennessee, Texas, Utah, and Washington. It is also involved in the entitlement and development of the underlying land; and the provision of mortgage services and title services to its home buyers. The company sells homes through its sales representatives, as well as through independent real estate brokers. Century Communities, Inc. was founded in 2000 and is headquartered in Greenwood Village, Colorado.