PulteGroup (NYSE:PHM) & Persimmon (OTCMKTS:PSMMY) Financial Review

PulteGroup (NYSE:PHM) and Persimmon (OTCMKTS:PSMMY) are both construction 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.

Risk & Volatility

PulteGroup has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Persimmon has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Dividends

PulteGroup pays an annual dividend of $0.88 per share and has a dividend yield of 0.8%. Persimmon pays an annual dividend of $2.00 per share and has a dividend yield of 6.6%. PulteGroup pays out 6.6% of its earnings in the form of a dividend. PulteGroup has increased its dividend for 7 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PulteGroup	15.50%	21.01%	14.73%
Persimmon	N/A	N/A	N/A

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PulteGroup	0	5	9	1	2.73
Persimmon	0	1	1	2	3.25

PulteGroup currently has a consensus target price of $134.15, indicating a potential upside of 18.40%. Given PulteGroup’s higher possible upside, analysts plainly believe PulteGroup is more favorable than Persimmon.

Earnings & Valuation

This table compares PulteGroup and Persimmon”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PulteGroup	$17.95 billion	1.25	$3.08 billion	$13.38	8.47
Persimmon	$4.09 billion	1.20	$341.33 million	N/A	N/A

PulteGroup has higher revenue and earnings than Persimmon.

Insider and Institutional Ownership

89.9% of PulteGroup shares are held by institutional investors. 0.8% of PulteGroup shares are held by company insiders. Comparatively, 0.6% of Persimmon 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.

Summary

PulteGroup beats Persimmon on 11 of the 16 factors compared between the two stocks.

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.

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.