Analyzing Lennar (NYSE:LEN) and Dream Finders Homes (NYSE:DFH)

Lennar (NYSE:LEN) and Dream Finders Homes (NYSE:DFH) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a summary of current recommendations for Lennar and Dream Finders Homes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	11	7	1	0	1.47
Dream Finders Homes	2	4	0	1	2.00

Lennar presently has a consensus price target of $79.33, suggesting a potential upside of 2.68%. Dream Finders Homes has a consensus price target of $26.00, suggesting a potential upside of 167.13%. Given Dream Finders Homes’ stronger consensus rating and higher possible upside, analysts clearly believe Dream Finders Homes is more favorable than Lennar.

Volatility & Risk

Lennar has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Dream Finders Homes has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500.

Profitability

This table compares Lennar and Dream Finders Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	4.09%	6.15%	4.00%
Dream Finders Homes	3.55%	10.38%	3.79%

Insider & Institutional Ownership

81.1% of Lennar shares are owned by institutional investors. Comparatively, 95.6% of Dream Finders Homes shares are owned by institutional investors. 10.1% of Lennar shares are owned by company insiders. Comparatively, 66.0% of Dream Finders Homes shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Lennar and Dream Finders Homes”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennar	$31.97 billion	0.58	$2.08 billion	$5.29	14.61
Dream Finders Homes	$4.32 billion	0.20	$217.20 million	$1.43	6.81

Lennar has higher revenue and earnings than Dream Finders Homes. Dream Finders Homes is trading at a lower price-to-earnings ratio than Lennar, indicating that it is currently the more affordable of the two stocks.

Summary

Lennar beats Dream Finders Homes on 8 of the 15 factors compared between the two stocks.

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.

About Dream Finders Homes

Dream Finders Homes, Inc. operates as a holding company for Dream Finders Holdings LLC that engages in homebuilding business in the United States. It designs, constructs, and sells single-family entry-level, and first-time and second time move-up homes in Charlotte, Raleigh, Jacksonville, Orlando, Denver, the Washington D.C. metropolitan area, Austin, Dallas, and Houston. The company also operates as a licensed home mortgage broker that underwrites, originates, and sells mortgages to Prime Lending; and provides insurance agency services, including closing, escrow, and title insurance, as well as mortgage banking solutions. It sells its homes through its sales representatives and independent real estate brokers. The company was founded in 2008 and is headquartered in Jacksonville, Florida.