Financial Review: Toll Brothers (TOL) and The Competition

Toll Brothers (NYSE:TOL) is one of 150 public companies in the “Household Durables” industry, but how does it contrast to its rivals? We will compare Toll Brothers to related companies based on the strength of its earnings, risk, valuation, institutional ownership, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

91.8% of Toll Brothers shares are held by institutional investors. Comparatively, 53.6% of shares of all “Household Durables” companies are held by institutional investors. 1.4% of Toll Brothers shares are held by insiders. Comparatively, 18.1% of shares of all “Household Durables” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Toll Brothers and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toll Brothers	1	4	14	1	2.75
Toll Brothers Competitors	1815	7446	8167	316	2.39

Toll Brothers presently has a consensus target price of $167.40, indicating a potential upside of 9.68%. As a group, “Household Durables” companies have a potential upside of 39.53%. Given Toll Brothers’ rivals higher probable upside, analysts clearly believe Toll Brothers has less favorable growth aspects than its rivals.

Dividends

Toll Brothers pays an annual dividend of $1.04 per share and has a dividend yield of 0.7%. Toll Brothers pays out 8.3% of its earnings in the form of a dividend. As a group, “Household Durables” companies pay a dividend yield of 4.1% and pay out 31.7% of their earnings in the form of a dividend. Toll Brothers has raised its dividend for 5 consecutive years.

Risk & Volatility

Toll Brothers has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Toll Brothers’ rivals have a beta of 1.77, meaning that their average share price is 77% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Toll Brothers	$10.76 billion	$1.35 billion	12.25
Toll Brothers Competitors	$5.33 billion	$313.99 million	9.23

Toll Brothers has higher revenue and earnings than its rivals. Toll Brothers 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 Toll Brothers and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toll Brothers	11.14%	14.21%	8.24%
Toll Brothers Competitors	-2.55%	-17.06%	1.25%

Summary

Toll Brothers beats its rivals on 11 of the 15 factors compared.

Toll Brothers Company Profile

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. It designs, builds, markets, and sells condominiums through Toll Brothers City Living. The company also develops a range of single-story living and first-floor primary bedroom suite home designs, as well as communities with recreational amenities, such as golf courses, marinas, pool complexes, country clubs, and fitness and recreation centers; and develops, operates, and rents apartments. In addition, it provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, the company owns and operates architectural, engineering, mortgage, title, land development, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and component manufacturing operations. It serves luxury first-time, move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Fort Washington, Pennsylvania.