Pico (NASDAQ: PICO) and Taylor Morrison Home (NYSE:TMHC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Profitability

This table compares Pico and Taylor Morrison Home’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pico -4.85% -0.37% -0.26%
Taylor Morrison Home 2.41% 4.18% 2.21%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Pico and Taylor Morrison Home, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pico 0 0 0 0 N/A
Taylor Morrison Home 0 3 1 0 2.25

Taylor Morrison Home has a consensus price target of $24.00, indicating a potential upside of 1.48%. Given Taylor Morrison Home’s higher probable upside, analysts clearly believe Taylor Morrison Home is more favorable than Pico.

Risk & Volatility

Pico has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Taylor Morrison Home has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Institutional & Insider Ownership

70.2% of Pico shares are held by institutional investors. Comparatively, 59.2% of Taylor Morrison Home shares are held by institutional investors. 4.7% of Pico shares are held by company insiders. Comparatively, 2.4% of Taylor Morrison Home shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Pico and Taylor Morrison Home’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pico $362.58 million 0.84 -$21.86 million ($0.31) -42.58
Taylor Morrison Home $3.55 billion 0.80 $52.61 million $1.84 12.85

Taylor Morrison Home has higher revenue and earnings than Pico. Pico is trading at a lower price-to-earnings ratio than Taylor Morrison Home, indicating that it is currently the more affordable of the two stocks.

Summary

Taylor Morrison Home beats Pico on 9 of the 12 factors compared between the two stocks.

Pico Company Profile

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.

Taylor Morrison Home Company Profile

Taylor Morrison Home Corporation is a homebuilder, which designs, builds and sells single-family detached and attached homes. The Company is also a land developer, with a portfolio of lifestyle and master-planned communities. Its segments include East, which includes Atlanta, Charlotte, North Florida, Raleigh, Southwest Florida and Tampa; Central, which includes Austin, Dallas, and Houston (each of the Dallas and Houston markets include both a Taylor Morrison division and a Darling Homes division); West, which includes Bay Area, Chicago, Denver, Phoenix, Sacramento and Southern California, and Mortgage Operations, which includes Taylor Morrison Home Funding, LLC (TMHF) and Inspired Title Services, LLC (Inspired Title). It operates under the Taylor Morrison and Darling Homes brand names. The Company also provides financial services to customers through its mortgage subsidiary, TMHF, and title insurance and closing settlement services through its title company, Inspired Title.

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