M/I Homes (MHO) and Beazer Homes USA (BZH) Critical Comparison

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M/I Homes (NYSE: BZH) and Beazer Homes USA (NYSE:BZH) are both small-cap construction companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider & Institutional Ownership

96.1% of M/I Homes shares are held by institutional investors. Comparatively, 85.9% of Beazer Homes USA shares are held by institutional investors. 3.9% of M/I Homes shares are held by company insiders. Comparatively, 7.6% of Beazer Homes USA shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares M/I Homes and Beazer Homes USA’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
M/I Homes $1.96 billion 0.37 $72.08 million $2.88 8.70
Beazer Homes USA $1.92 billion 0.22 $31.81 million $1.54 8.18

M/I Homes has higher revenue and earnings than Beazer Homes USA. Beazer Homes USA is trading at a lower price-to-earnings ratio than M/I Homes, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

M/I Homes has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Beazer Homes USA has a beta of 2.47, indicating that its share price is 147% more volatile than the S&P 500.

Profitability

This table compares M/I Homes and Beazer Homes USA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
M/I Homes 3.91% 12.69% 5.19%
Beazer Homes USA -3.59% 10.99% 3.05%

Analyst Recommendations

This is a summary of current recommendations for M/I Homes and Beazer Homes USA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
M/I Homes 0 0 2 0 3.00
Beazer Homes USA 0 2 2 0 2.50

M/I Homes presently has a consensus price target of $39.50, indicating a potential upside of 57.56%. Beazer Homes USA has a consensus price target of $19.67, indicating a potential upside of 56.08%. Given M/I Homes’ stronger consensus rating and higher probable upside, analysts clearly believe M/I Homes is more favorable than Beazer Homes USA.

Summary

M/I Homes beats Beazer Homes USA on 11 of the 13 factors compared between the two stocks.

About M/I Homes

M/I Homes, Inc., together with its subsidiaries, operates as a builder of single-family homes in Ohio, Indiana, Illinois, Minnesota, Maryland, Virginia, North Carolina, Florida, and Texas, the United States. The company operates through Midwest Homebuilding, Southern Homebuilding, Mid-Atlantic Homebuilding, and Financial Services segments. It designs, constructs, markets, and sells single-family homes and attached townhomes to first-time, move-up, empty-nester, and luxury buyers under the M/I Homes and Showcase Collection brand names. The company also purchases undeveloped land to develop into developed lots for the construction of single-family homes, as well as for sale to others. In addition, it originates and sells mortgages; and serves as a title insurance agent by providing title insurance policies, examination, and closing services to purchasers of its homes. The company was formerly known as M/I Schottenstein Homes, Inc. and changed its name to M/I Homes, Inc. in January 2004. M/I Homes, Inc. was incorporated in 1973 and is based in Columbus, Ohio.

About Beazer Homes USA

Beazer Homes USA, Inc. operates as a homebuilder in the United States. The company designs, constructs, and sells single-family and multi-family homes for entry-level, move-up, or retirement-oriented home buyers under the Beazer Homes brand name. It sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Delaware, Indiana, Maryland, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina. Beazer Homes USA, Inc. was founded in 1985 and is headquartered in Atlanta, Georgia.

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