Xinyuan Real Estate (NYSE:XIN) and Lennar (NYSE:LEN) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Risk & Volatility

Xinyuan Real Estate has a beta of 1.78, meaning that its share price is 78% more volatile than the S&P 500. Comparatively, Lennar has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Valuation & Earnings

This table compares Xinyuan Real Estate and Lennar’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Xinyuan Real Estate $1.98 billion 0.18 $63.62 million N/A N/A
Lennar $12.65 billion 1.09 $810.48 million $3.81 11.00

Lennar has higher revenue and earnings than Xinyuan Real Estate.

Insider & Institutional Ownership

12.0% of Xinyuan Real Estate shares are owned by institutional investors. Comparatively, 85.1% of Lennar shares are owned by institutional investors. 8.5% of Lennar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Xinyuan Real Estate pays an annual dividend of $0.39 per share and has a dividend yield of 9.1%. Lennar pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Lennar pays out 4.2% of its earnings in the form of a dividend. Xinyuan Real Estate has raised its dividend for 3 consecutive years. Xinyuan Real Estate is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Xinyuan Real Estate and Lennar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xinyuan Real Estate 0 0 0 0 N/A
Lennar 0 1 16 0 2.94

Lennar has a consensus target price of $63.67, suggesting a potential upside of 51.95%. Given Lennar’s higher probable upside, analysts plainly believe Lennar is more favorable than Xinyuan Real Estate.

Profitability

This table compares Xinyuan Real Estate and Lennar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xinyuan Real Estate 1.59% 3.21% 0.40%
Lennar 6.76% 12.87% 6.10%

Summary

Lennar beats Xinyuan Real Estate on 11 of the 15 factors compared between the two stocks.

Xinyuan Real Estate Company Profile

Xinyuan Real Estate Co., Ltd., through its subsidiaries, develops residential real estate properties for middle income consumers in the People's Republic of China and the United States. It develops residential projects, such as multi-layer apartment buildings, sub-high-rise apartment buildings, or high-rise apartment buildings; auxiliary services and amenities, such as retail outlets, leisure and health facilities, kindergartens, and schools; and small scale residential properties, as well as office, mixed-use, and commercial properties. The company also acquires development sites through public auctions of government land and direct negotiations. In addition, it provides property management services for its developments and other real estate-related services. Further, the company offers landscaping engineering and management, real estate consulting and marketing, leasing management, culture and media, property decoration, electronic commerce, technical, and management consulting services; operates retail stores; sells construction materials; develops technologies; and installs intercom systems. Xinyuan Real Estate Co., Ltd. was founded in 1997 and is headquartered in Beijing, the People's Republic of China.

Lennar Company Profile

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. The company operates through Homebuilding East, Homebuilding Central, Homebuilding West, Lennar Financial Services, Rialto, and Lennar Multifamily segments. 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. The company primarily sells single-family attached and detached homes in communities targeted to first-time homebuyers, move-up homebuyers, active adult homebuyers, and luxury homebuyers. The company also offers mortgage financing, title insurance, and closing services for home buyers and others, as well as real estate brokerage services. In addition, it is involved in raising, investing, and managing third party capital; and originating and selling into securitizations commercial mortgage loans, as well as investing in real estate related mortgage loans, properties, and related securities. Further, the company sponsors and invests in private equity vehicles; and provides asset management and other services to the vehicles and other third parties. Additionally, it develops, constructs, and manages multifamily rental properties. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

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