Critical Survey: Brookfield Residential Properties (BRP) and KB Home (KBH)
Brookfield Residential Properties (NYSE: BRP) and KB Home (NYSE:KBH) are both homebuilding – nec companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
This is a summary of current recommendations and price targets for Brookfield Residential Properties and KB Home, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Brookfield Residential Properties||0||0||1||0||3.00|
Brookfield Residential Properties presently has a consensus price target of $28.00, suggesting a potential upside of 15.51%. KB Home has a consensus price target of $21.50, suggesting a potential downside of 23.12%. Given Brookfield Residential Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Brookfield Residential Properties is more favorable than KB Home.
Earnings & Valuation
This table compares Brookfield Residential Properties and KB Home’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Brookfield Residential Properties||N/A||N/A||N/A||$2.33||10.40|
|KB Home||$3.59 billion||0.67||$105.61 million||$1.39||20.12|
KB Home has higher revenue and earnings than Brookfield Residential Properties. Brookfield Residential Properties is trading at a lower price-to-earnings ratio than KB Home, indicating that it is currently the more affordable of the two stocks.
KB Home pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Brookfield Residential Properties does not pay a dividend. KB Home pays out 7.2% of its earnings in the form of a dividend.
Institutional and Insider Ownership
97.6% of KB Home shares are held by institutional investors. 8.6% of KB Home shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Brookfield Residential Properties and KB Home’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Brookfield Residential Properties||12.74%||18.70%||8.12%|
Brookfield Residential Properties beats KB Home on 8 of the 12 factors compared between the two stocks.
About Brookfield Residential Properties
Brookfield Residential Properties Inc. is a land developer and homebuilder with operations in Canada and the United States. The Company develops land to create master-planned communities and build and sell lots to third-party builders, as well as to its own homebuilding division. It also participates in real estate opportunities, including infill projects, mixed-use developments, infrastructure projects and joint ventures. It operates through three segments within North America: Canada, California and Central and Eastern United States. Its Canadian operations are in the Alberta and Ontario markets; California operations include Northern California (San Francisco Bay Area and Sacramento) and Southern California (Los Angeles/Southland and San Diego/Riverside), and Central and Eastern United States operations include Washington, D.C. Area, Colorado, Texas and Arizona. It is focused on land development and single family and multi-family homebuilding in the markets in which it operates.
About KB Home
KB HOME is a homebuilding company. The Company is engaged in selling and building a range of new homes designed primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family residential homes. It operates through five segments, which consist of four homebuilding segments and one financial services segment. Its homebuilding segments include West Coast, Southwest, Central and Southeast. The homebuilding segments are engaged in the acquisition and development of land primarily for residential purposes. The financial services segment offers property and casualty insurance and, in certain instances, earthquake, flood and personal property insurance to its homebuyers in the same markets as its homebuilding segments, and provides title services in the majority of markets located within its Central and Southeast homebuilding segments. It offers homes in development communities, at urban in-fill locations and as part of mixed-use projects.
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