LGI Homes (NASDAQ: LGIH) and Brookfield Residential Properties (NYSE:BRP) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Valuation & Earnings

This table compares LGI Homes and Brookfield Residential Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LGI Homes $940.22 million 1.25 $129.13 million $3.78 14.39
Brookfield Residential Properties N/A N/A N/A N/A N/A

LGI Homes has higher revenue and earnings than Brookfield Residential Properties.

Institutional & Insider Ownership

93.4% of LGI Homes shares are held by institutional investors. 13.6% of LGI Homes shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares LGI Homes and Brookfield Residential Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LGI Homes 9.22% 23.65% 10.25%
Brookfield Residential Properties 12.74% 18.70% 8.12%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for LGI Homes and Brookfield Residential Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LGI Homes 0 4 1 0 2.20
Brookfield Residential Properties 0 0 1 0 3.00

LGI Homes presently has a consensus price target of $46.50, suggesting a potential downside of 14.49%. Brookfield Residential Properties has a consensus price target of $28.00, suggesting a potential upside of 16.67%. Given Brookfield Residential Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Brookfield Residential Properties is more favorable than LGI Homes.

Summary

LGI Homes beats Brookfield Residential Properties on 5 of the 8 factors compared between the two stocks.

LGI Homes Company Profile

LGI Homes, Inc. is a homebuilder and land developer. The Company is engaged in the design, construction, marketing and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington and Tennessee. The Company operates through five segments: the Texas division, the Southwest division, the Southeast division, the Florida division and the Northwest division. The Texas division includes homebuilding operations in Houston, Dallas/Fort Worth, San Antonio and Austin locations. The Southwest division includes homebuilding operations in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs locations. The Southeast division includes homebuilding operations in Atlanta, Charlotte and Nashville locations. The Florida division includes homebuilding operations in Tampa, Orlando, Fort Myers and Jacksonville locations. The Northwest division includes homebuilding operations in Seattle location.

Brookfield Residential Properties Company Profile

Brookfield Residential Properties Inc. is a land developer and homebuilder with operations in Canada and the United States. The Company develops land to create master-planned communities and build and sell lots to third-party builders, as well as to its own homebuilding division. It also participates in real estate opportunities, including infill projects, mixed-use developments, infrastructure projects and joint ventures. It operates through three segments within North America: Canada, California and Central and Eastern United States. Its Canadian operations are in the Alberta and Ontario markets; California operations include Northern California (San Francisco Bay Area and Sacramento) and Southern California (Los Angeles/Southland and San Diego/Riverside), and Central and Eastern United States operations include Washington, D.C. Area, Colorado, Texas and Arizona. It is focused on land development and single family and multi-family homebuilding in the markets in which it operates.

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