Hovnanian Enterprises Inc (HOV) vs LGI Homes, Inc. (LGIH)

Hovnanian Enterprises Inc and LGI Homes, Inc. are both Residential Construction companies. LGI Homes, Inc. is the larger, with a market value of $1.1B against $654.9M — 1.7× the size. LGI Homes, Inc. trades at the lower P/E: 17.5× against 102×. Hovnanian Enterprises Inc grew revenue faster over the last twelve months: −10.1% against −17.0%. LGI Homes, Inc. has the higher net margin (3.89% vs 0.21%) and the lower return on invested capital (1.19% vs 4.98%). Across the 22 metrics below, Hovnanian Enterprises Inc leads on 11 and LGI Homes, Inc. on 11.

Valuation

Metric HOV LGIH Residential Construction median
P/E 101.90 17.54 13.51
P/S 0.26 0.68 1.02
P/B 1.08 0.54 1.17
Price to free cash flow 3.65 6.30 16.79
EV/EBITDA 6.12 36.05 10.48
EV/Sales 0.13 1.57 1.31
Earnings yield 0.98% 5.70% 7.37%
Free cash flow yield 27.39% 15.87% 5.73%

Profitability

Metric HOV LGIH Residential Construction median
Gross margin 13.51% 19.50% 22.30%
Operating margin 1.24% 4.08% 9.03%
Net margin 0.21% 3.89% 7.30%
Free cash flow margin 7.16% 10.82% 8.46%
Return on equity 0.86% 3.16% 9.84%
Return on assets 0.22% 1.67% 7.43%
Return on invested capital 4.98% 1.19% 6.90%

Growth

Metric HOV LGIH Residential Construction median
Revenue growth (TTM) (10.10%) (16.95%) (7.37%)
EPS growth (last fiscal year) (76.63%) (62.41%) —
Revenue growth, 5-year CAGR 4.91% (6.35%) 8.74%
Net income growth, 5-year CAGR 2.06% (25.86%) 8.43%

Health

Metric HOV LGIH Residential Construction median
Debt to equity 0.04 0.74 0.20
Current ratio 1.46 17.74 3.56
Net debt to EBITDA (5.03) 18.97 0.28

Dividend

Metric HOV LGIH Residential Construction median
Dividend yield — — 0.89%
Payout ratio 0.00 0.00 0.00

Size

Metric HOV LGIH Residential Construction median
Market cap 654.93m 1.14b 4.18b

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