Lennar (LEN) vs. Its Peers Critical Analysis

Lennar (NYSE:LEN) is one of 23 public companies in the “BLDG – RSDNT/COMR” industry, but how does it contrast to its rivals? We will compare Lennar to related companies based on the strength of its profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Dividends

Lennar pays an annual dividend of $2.00 per share and has a dividend yield of 1.8%. Lennar pays out 16.5% of its earnings in the form of a dividend. As a group, “BLDG – RSDNT/COMR” companies pay a dividend yield of 1.6% and pay out 13.0% of their earnings in the form of a dividend. Lennar has raised its dividend for 1 consecutive years.

Volatility & Risk

Lennar has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Lennar’s rivals have a beta of 0.95, suggesting that their average share price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Lennar and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	0	14	2	1	2.24
Lennar Competitors	378	1821	2061	66	2.42

Lennar currently has a consensus price target of $128.85, suggesting a potential upside of 16.76%. As a group, “BLDG – RSDNT/COMR” companies have a potential upside of 19.02%. Given Lennar’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Lennar has less favorable growth aspects than its rivals.

Insider and Institutional Ownership

81.1% of Lennar shares are owned by institutional investors. Comparatively, 78.6% of shares of all “BLDG – RSDNT/COMR” companies are owned by institutional investors. 10.0% of Lennar shares are owned by company insiders. Comparatively, 8.2% of shares of all “BLDG – RSDNT/COMR” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Lennar and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Lennar	$35.37 billion	$3.93 billion	9.13
Lennar Competitors	$45.29 billion	$1.27 billion	5.50

Lennar’s rivals have higher revenue, but lower earnings than Lennar. Lennar is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Lennar and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	9.20%	12.73%	8.57%
Lennar Competitors	11.42%	18.05%	10.97%

Summary

Lennar rivals beat Lennar on 8 of the 15 factors compared.

About Lennar

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company’s 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; and development, construction, and management of multifamily rental properties. It also offers residential mortgage financing, title, insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans. In addition, the company is involved in the fund investment activity. It primarily serves first-time, move-up, active adult, and luxury homebuyers. Lennar Corporation was founded in 1954 and is based in Miami, Florida.