Analyzing LGI Homes (NASDAQ:LGIH) and Cyrela Brazil Realty (OTCMKTS:CYRBY)

Cyrela Brazil Realty (OTCMKTS:CYRBY) and LGI Homes (NASDAQ:LGIH) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Risk & Volatility

Cyrela Brazil Realty has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, LGI Homes has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500.

Insider and Institutional Ownership

84.9% of LGI Homes shares are held by institutional investors. 12.3% of LGI Homes shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Cyrela Brazil Realty and LGI Homes, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cyrela Brazil Realty	0	0	0	0	0.00
LGI Homes	2	2	2	0	2.00

LGI Homes has a consensus target price of $72.13, suggesting a potential upside of 62.19%. Given LGI Homes’ stronger consensus rating and higher possible upside, analysts clearly believe LGI Homes is more favorable than Cyrela Brazil Realty.

Valuation & Earnings

This table compares Cyrela Brazil Realty and LGI Homes”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cyrela Brazil Realty	$1.48 billion	1.42	$305.72 million	$0.88	6.20
LGI Homes	$2.20 billion	0.47	$196.07 million	$4.53	9.82

Cyrela Brazil Realty has higher earnings, but lower revenue than LGI Homes. Cyrela Brazil Realty is trading at a lower price-to-earnings ratio than LGI Homes, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cyrela Brazil Realty and LGI Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cyrela Brazil Realty	21.07%	17.20%	7.84%
LGI Homes	5.93%	5.50%	2.88%

Summary

LGI Homes beats Cyrela Brazil Realty on 9 of the 14 factors compared between the two stocks.

About Cyrela Brazil Realty

Cyrela Brazil Realty S.A. Empreendimentos e Participações develops and constructs residential properties in Brazil. It also provides real estate services, such as construction management and technical consultancy services. The company was founded in 1962 and is headquartered in São Paulo, Brazil.

About LGI Homes

LGI Homes, Inc. designs, constructs, and sells homes. It offers entry-level homes, such as attached and detached homes, and active adult homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. The company also engages in the wholesale business, which include building and selling homes to large institutions looking to acquire single-family rental properties. It serves customers in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland, and Utah. LGI Homes, Inc. was founded in 2003 and is headquartered in The Woodlands, Texas.