Head to Head Survey: Lennar Corporation (LEN) and CalAtlantic Group (CAA)
Lennar Corporation (NYSE: LEN) and CalAtlantic Group (NYSE:CAA) are both mid-cap construction companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.
Earnings and Valuation
This table compares Lennar Corporation and CalAtlantic Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Lennar Corporation||$11.81 billion||0.91||$1.36 billion||$3.42||15.44|
|CalAtlantic Group||$6.67 billion||0.61||$792.59 million||$3.59||10.20|
Lennar Corporation has higher revenue and earnings than CalAtlantic Group. CalAtlantic Group is trading at a lower price-to-earnings ratio than Lennar Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for Lennar Corporation and CalAtlantic Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lennar Corporation presently has a consensus target price of $56.20, suggesting a potential upside of 6.44%. CalAtlantic Group has a consensus target price of $40.00, suggesting a potential upside of 9.20%. Given CalAtlantic Group’s higher probable upside, analysts plainly believe CalAtlantic Group is more favorable than Lennar Corporation.
Volatility and Risk
Lennar Corporation has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, CalAtlantic Group has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.
Insider and Institutional Ownership
81.1% of Lennar Corporation shares are owned by institutional investors. 12.2% of Lennar Corporation shares are owned by company insiders. Comparatively, 39.5% of CalAtlantic Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Lennar Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.3%. CalAtlantic Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Lennar Corporation pays out 4.7% of its earnings in the form of a dividend. CalAtlantic Group pays out 4.5% 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. CalAtlantic Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Lennar Corporation and CalAtlantic Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Lennar Corporation beats CalAtlantic Group on 10 of the 17 factors compared between the two stocks.
About Lennar Corporation
Lennar Corporation is a provider of real estate related financial services, commercial real estate, investment management and finance company. The Company is a homebuilder that operates in various states. Its segments include Homebuilding East, Homebuilding Central, Homebuilding West, Lennar Financial Services, Rialto and Lennar Multifamily. It is a developer of multifamily rental properties. Its 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. It operates primarily under the Lennar brand name. The Lennar Financial Services segment includes mortgage financing, title insurance and closing services for both buyers of its homes and others. The Rialto segment is a real estate, investment management, and finance company. The Lennar Multifamily segment focuses on developing a portfolio of institutional multifamily rental properties in the United States markets.
About CalAtlantic Group
CalAtlantic Group, Inc. is a diversified builder of single-family attached and detached homes. The Company operates through two segments: homebuilding and financial services. The homebuilding segment operations include acquiring and developing land, and constructing and selling single-family attached and detached homes. The Financial Services segment includes mortgage financing operation, which provides mortgage financing to its homebuyers in the markets, in which it operates, and sells all of the loans it originates in the secondary mortgage market. As of December 31, 2016, the Company built homes in communities that meet the desires of customers across the homebuilding spectrum, from entry level to luxury, in over 40 metropolitan statistical areas spanning 17 states and the District of Columbia. The Company also provides mortgage, title and escrow services. The Company provides mortgage loans to its homebuyers through its mortgage financing subsidiary, CalAtlantic Mortgage.
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