Toll Brothers (NYSE:TOL) vs. Persimmon (OTCMKTS:PSMMY) Financial Analysis

Persimmon (OTCMKTS:PSMMY) and Toll Brothers (NYSE:TOL) are both construction companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Persimmon and Toll Brothers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Persimmon	0	0	4	1	3.20
Toll Brothers	2	6	8	2	2.56

Toll Brothers has a consensus price target of $150.36, indicating a potential upside of 7.55%. Given Toll Brothers’ higher probable upside, analysts plainly believe Toll Brothers is more favorable than Persimmon.

Dividends

Persimmon pays an annual dividend of $0.91 per share and has a dividend yield of 2.6%. Toll Brothers pays an annual dividend of $1.00 per share and has a dividend yield of 0.7%. Toll Brothers pays out 7.4% of its earnings in the form of a dividend. Toll Brothers has raised its dividend for 5 consecutive years.

Profitability

This table compares Persimmon and Toll Brothers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Persimmon	N/A	N/A	N/A
Toll Brothers	12.28%	16.74%	9.49%

Valuation and Earnings

This table compares Persimmon and Toll Brothers”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Persimmon	$4.09 billion	1.38	$341.33 million	N/A	N/A
Toll Brothers	$10.97 billion	1.23	$1.35 billion	$13.56	10.31

Toll Brothers has higher revenue and earnings than Persimmon.

Insider & Institutional Ownership

91.8% of Toll Brothers shares are owned by institutional investors. 0.6% of Persimmon shares are owned by insiders. Comparatively, 1.5% of Toll Brothers shares are owned 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.

Volatility and Risk

Persimmon has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Toll Brothers has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Summary

Toll Brothers beats Persimmon on 12 of the 16 factors compared between the two stocks.

About Persimmon

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services under the FibreNest brand; and timber frame, insulated wall panels, and roof cassettes under the brand Space4. Further, it offers concrete bricks and roof tile. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.

About Toll Brothers

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. It designs, builds, markets, and sells condominiums through Toll Brothers City Living. The company also develops a range of single-story living and first-floor primary bedroom suite home designs, as well as communities with recreational amenities, such as golf courses, marinas, pool complexes, country clubs, and fitness and recreation centers; and develops, operates, and rents apartments. In addition, it provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, the company owns and operates architectural, engineering, mortgage, title, land development, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and component manufacturing operations. It serves luxury first-time, move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Fort Washington, Pennsylvania.