Head-To-Head Comparison: PulteGroup (NYSE:PHM) versus Garmin (NYSE:GRMN)

Garmin (NYSE:GRMN) and PulteGroup (NYSE:PHM) are both large-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Dividends

Garmin pays an annual dividend of $4.20 per share and has a dividend yield of 1.5%. PulteGroup pays an annual dividend of $1.04 per share and has a dividend yield of 0.8%. Garmin pays out 40.3% of its earnings in the form of a dividend. PulteGroup pays out 11.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Garmin has increased its dividend for 8 consecutive years and PulteGroup has increased its dividend for 7 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Garmin has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, PulteGroup has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Earnings and Valuation

This table compares Garmin and PulteGroup”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garmin	$7.25 billion	7.60	$1.66 billion	$10.42	27.42
PulteGroup	$17.31 billion	1.41	$2.22 billion	$9.36	14.14

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

Profitability

This table compares Garmin and PulteGroup’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Garmin	25.58%	21.94%	17.81%
PulteGroup	11.24%	14.29%	10.19%

Insider and Institutional Ownership

81.6% of Garmin shares are held by institutional investors. Comparatively, 89.9% of PulteGroup shares are held by institutional investors. 14.8% of Garmin shares are held by company insiders. Comparatively, 0.7% of PulteGroup shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Garmin and PulteGroup, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garmin	1	5	3	1	2.40
PulteGroup	1	9	10	1	2.52

Garmin currently has a consensus target price of $315.29, indicating a potential upside of 10.34%. PulteGroup has a consensus target price of $136.76, indicating a potential upside of 3.33%. Given Garmin’s higher possible upside, analysts plainly believe Garmin is more favorable than PulteGroup.

Summary

Garmin beats PulteGroup on 10 of the 17 factors compared between the two stocks.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.

About PulteGroup

PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West brand names. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was founded in 1950 and is headquartered in Atlanta, Georgia.