NVR (NYSE: NVR) and Lennar Corporation (NYSE:LEN.B) are both mid-cap construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitabiliy, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Dividends

Lennar Corporation pays an annual dividend of $0.16 per share. NVR does not pay a dividend. Lennar Corporation pays out 4.7% of its earnings in the form of a dividend.

Profitability

This table compares NVR and Lennar Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NVR 7.90% 34.48% 17.23%
Lennar Corporation 6.78% 12.57% 5.69%

Institutional & Insider Ownership

78.8% of NVR shares are owned by institutional investors. Comparatively, 3.2% of Lennar Corporation shares are owned by institutional investors. 11.3% of NVR shares are owned by insiders. Comparatively, 15.0% of Lennar Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

NVR has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Lennar Corporation has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Earnings and Valuation

This table compares NVR and Lennar Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NVR $5.97 billion 1.59 $734.42 million $113.39 22.32
Lennar Corporation N/A N/A N/A $3.42 N/A

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

Analyst Recommendations

This is a breakdown of recent recommendations for NVR and Lennar Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NVR 0 3 1 0 2.25
Lennar Corporation 0 0 0 0 N/A

NVR currently has a consensus price target of $2,690.00, suggesting a potential upside of 6.29%.

Summary

NVR beats Lennar Corporation on 9 of the 11 factors compared between the two stocks.

About NVR

NVR, Inc. is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings. The Company’s segments are Homebuilding Mid Atlantic, Homebuilding North East, Homebuilding Mid East, Homebuilding South East and Mortgage Banking. Its Homebuilding Mid Atlantic segment operates in various geographic regions, which include Maryland, Virginia, West Virginia, Delaware and Washington, District of Columbia (D.C.). Its Homebuilding North East segment operates in various geographic regions, which include New Jersey and Eastern Pennsylvania. Its Homebuilding Mid East segment operates in various geographic regions, which include New York, Ohio, Indiana and Illinois, The Homebuilding South East segment operates in various geographic regions, which include North Carolina, South Carolina, Florida and Tennessee. The Mortgage Banking segment provides mortgage-related services to home building customers through its mortgage banking operations.

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.

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