Head-To-Head Analysis: D.R. Horton (DHI) vs. PICO Holdings (PICO)
D.R. Horton (NYSE: DHI) and PICO Holdings (NASDAQ:PICO) are both construction companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.
Volatility and Risk
D.R. Horton has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, PICO Holdings has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
Earnings and Valuation
This table compares D.R. Horton and PICO Holdings’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|D.R. Horton||$13.67 billion||0.97||$1.64 billion||$2.66||13.30|
|PICO Holdings||$391.17 million||0.96||$10.10 million||($0.24)||-67.50|
D.R. Horton has higher revenue and earnings than PICO Holdings. PICO Holdings is trading at a lower price-to-earnings ratio than D.R. Horton, indicating that it is currently the more affordable of the two stocks.
D.R. Horton pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. PICO Holdings does not pay a dividend. D.R. Horton pays out 15.0% of its earnings in the form of a dividend. PICO Holdings has increased its dividend for 5 consecutive years.
Institutional and Insider Ownership
82.4% of D.R. Horton shares are owned by institutional investors. Comparatively, 61.6% of PICO Holdings shares are owned by institutional investors. 7.2% of D.R. Horton shares are owned by insiders. Comparatively, 4.7% of PICO Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a summary of current ratings and target prices for D.R. Horton and PICO Holdings, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
D.R. Horton presently has a consensus target price of $36.70, suggesting a potential upside of 3.73%. Given D.R. Horton’s higher probable upside, analysts clearly believe D.R. Horton is more favorable than PICO Holdings.
This table compares D.R. Horton and PICO Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
D.R. Horton beats PICO Holdings on 13 of the 15 factors compared between the two stocks.
About D.R. Horton
D.R. Horton, Inc. is a homebuilding company. The Company constructed and sold homes in 27 states and 79 markets, as of September 30, 2015. The Company’s segments include its 39 homebuilding divisions, its financial services operations and its other business activities. In the homebuilding segment, the Company builds and sells single-family detached homes and attached homes, such as town homes, duplexes, triplexes and condominiums. The Company’s 39 homebuilding divisions are aggregated into six segments: East Region, South Central Region, Midwest Region, West Region, Southwest Region and Southeast Region. In the financial services segment, the Company sells mortgages and collects fees for title insurance agency and closing services. The Company has subsidiaries that conduct insurance-related operations; construct and own income-producing rental properties; own non-residential real estate, including ranch land and improvements, and own and operate oil and gas-related assets.
About PICO Holdings
PICO Holdings, Inc. (PICO) is a holding company. The Company’s segments include Water Resource and Water Storage Operations; Real Estate Operations, and Corporate. Its subsidiary, Vidler Water Company, Inc. (Vidler), owns water resources and water storage operations in the southwestern United States, with assets and operations in Nevada, Arizona, Colorado and New Mexico. The Real Estate Operations are conducted through UCP, Inc. (UCP), which is a homebuilder and land developer in markets located in California, Washington State, North Carolina, South Carolina and Tennessee. The Corporate segment includes its investments in small businesses, typically venture capital-type situations. As of December 31, 2016, the Company owned a membership interest in, and was the managing partner of, Fish Springs Ranch, LLC (FSR), which owned the Fish Springs Ranch and other properties totaling approximately 7,313 acres in Honey Lake Valley in Washoe County, approximately 40 miles north of Reno, Nevada.
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