Universal Electronics (NASDAQ:UEIC) vs. KB Home (NYSE:KBH) Critical Comparison

KB Home (NYSE:KBH) and Universal Electronics (NASDAQ:UEIC) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Profitability

This table compares KB Home and Universal Electronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KB Home	4.39%	6.56%	3.71%
Universal Electronics	-4.57%	2.70%	1.44%

Volatility and Risk

KB Home has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Universal Electronics has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Institutional & Insider Ownership

96.1% of KB Home shares are held by institutional investors. Comparatively, 79.3% of Universal Electronics shares are held by institutional investors. 4.7% of KB Home shares are held by insiders. Comparatively, 17.1% of Universal Electronics shares are held by 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.

Analyst Recommendations

This is a summary of recent recommendations for KB Home and Universal Electronics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KB Home	4	8	4	0	2.00
Universal Electronics	1	3	0	0	1.75

KB Home currently has a consensus price target of $53.08, indicating a potential upside of 27.43%. Universal Electronics has a consensus price target of $4.25, indicating a potential downside of 22.73%. Given KB Home’s stronger consensus rating and higher probable upside, equities research analysts plainly believe KB Home is more favorable than Universal Electronics.

Earnings & Valuation

This table compares KB Home and Universal Electronics”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KB Home	$5.18 billion	0.49	$428.79 million	$3.55	11.73
Universal Electronics	$368.29 million	0.19	-$18.60 million	($1.16)	-4.74

KB Home has higher revenue and earnings than Universal Electronics. Universal Electronics is trading at a lower price-to-earnings ratio than KB Home, indicating that it is currently the more affordable of the two stocks.

Summary

KB Home beats Universal Electronics on 13 of the 14 factors compared between the two stocks.

About KB Home

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.

About Universal Electronics

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.