Pico (NASDAQ: PICO) and Taylor Morrison Home (NYSE:TMHC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Earnings & Valuation

This table compares Pico and Taylor Morrison Home’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pico $362.58 million 0.84 -$21.86 million ($0.31) -42.58
Taylor Morrison Home $3.55 billion 0.82 $52.61 million $0.62 39.31

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

Insider and Institutional Ownership

70.2% of Pico shares are held by institutional investors. Comparatively, 59.2% of Taylor Morrison Home shares are held by institutional investors. 4.7% of Pico shares are held by insiders. Comparatively, 2.4% of Taylor Morrison Home shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Pico and Taylor Morrison Home, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pico 0 0 0 0 N/A
Taylor Morrison Home 0 3 1 0 2.25

Taylor Morrison Home has a consensus target price of $24.00, indicating a potential downside of 1.52%. Given Taylor Morrison Home’s higher possible upside, analysts clearly believe Taylor Morrison Home is more favorable than Pico.

Profitability

This table compares Pico and Taylor Morrison Home’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pico -4.85% -0.37% -0.26%
Taylor Morrison Home 2.41% 4.18% 2.21%

Risk & Volatility

Pico has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, Taylor Morrison Home has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Summary

Taylor Morrison Home beats Pico on 9 of the 12 factors compared between the two stocks.

About Pico

PICO Holdings, Inc. (PICO) is a holding company. The Company’s segments include Water Resource and Water Storage Operations; Real Estate Operations, and Corporate. Its subsidiary, Vidler Water Company, Inc. (Vidler), owns water resources and water storage operations in the southwestern United States, with assets and operations in Nevada, Arizona, Colorado and New Mexico. The Real Estate Operations are conducted through UCP, Inc. (UCP), which is a homebuilder and land developer in markets located in California, Washington State, North Carolina, South Carolina and Tennessee. The Corporate segment includes its investments in small businesses, typically venture capital-type situations. As of December 31, 2016, the Company owned a membership interest in, and was the managing partner of, Fish Springs Ranch, LLC (FSR), which owned the Fish Springs Ranch and other properties totaling approximately 7,313 acres in Honey Lake Valley in Washoe County, approximately 40 miles north of Reno, Nevada.

About Taylor Morrison Home

Taylor Morrison Home Corporation is a homebuilder, which designs, builds and sells single-family detached and attached homes. The Company is also a land developer, with a portfolio of lifestyle and master-planned communities. Its segments include East, which includes Atlanta, Charlotte, North Florida, Raleigh, Southwest Florida and Tampa; Central, which includes Austin, Dallas, and Houston (each of the Dallas and Houston markets include both a Taylor Morrison division and a Darling Homes division); West, which includes Bay Area, Chicago, Denver, Phoenix, Sacramento and Southern California, and Mortgage Operations, which includes Taylor Morrison Home Funding, LLC (TMHF) and Inspired Title Services, LLC (Inspired Title). It operates under the Taylor Morrison and Darling Homes brand names. The Company also provides financial services to customers through its mortgage subsidiary, TMHF, and title insurance and closing settlement services through its title company, Inspired Title.

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