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Hovnanian Enterprises Inc (HOV) vs Meritage Homes Corporation (MTH)

Hovnanian Enterprises Inc and Meritage Homes Corporation are both Residential Construction companies. Meritage Homes Corporation is the larger, with a market value of $4.6B against $614.0M — 7.5× the size. Meritage Homes Corporation trades at the lower P/E: 15.9× against 118×. Hovnanian Enterprises Inc grew revenue faster over the last twelve months: −10.1% against −14.9%. Meritage Homes Corporation has the higher net margin (5.79% vs 0.21%) and the lower return on invested capital (3.51% vs 4.98%). Across the 22 metrics below, Meritage Homes Corporation leads on 12 and Hovnanian Enterprises Inc on 10.

Valuation

Metric HOV MTH Residential Construction median
P/E 117.83 15.93 15.45
P/S 0.24 0.89 1.32
P/B 0.98 0.91 1.24
Price to free cash flow 3.33 9.48 21.26
EV/EBITDA 5.02 15.47 12.52
EV/Sales 0.10 1.12 1.48
Earnings yield 0.85% 6.28% 6.38%
Free cash flow yield 30.00% 10.55% 4.64%

Profitability

Metric HOV MTH Residential Construction median
Gross margin 13.51% 17.72% 19.15%
Operating margin 1.24% 6.78% 7.50%
Net margin 0.21% 5.79% 6.72%
Free cash flow margin 7.16% 9.41% 8.39%
Return on equity 0.86% 5.76% 11.56%
Return on assets 0.22% 3.88% 6.99%
Return on invested capital 4.98% 3.51% 4.98%

Growth

Metric HOV MTH Residential Construction median
Revenue growth (TTM) (10.10%) (14.89%) (6.00%)
EPS growth (last fiscal year) (76.63%) (40.77%) (25.22%)
Revenue growth, 5-year CAGR 4.91% 5.41% 8.74%
Net income growth, 5-year CAGR 2.06% 1.36% 8.25%

Health

Metric HOV MTH Residential Construction median
Debt to equity 0.04 0.37 0.17
Current ratio 1.46 1.72 3.25
Net debt to EBITDA (5.03) 1.86 0.37

Dividend

Metric HOV MTH Residential Construction median
Dividend yield — 2.64% 1.15%
Payout ratio — 0.42 0.18

Size

Metric HOV MTH Residential Construction median
Market cap 614.02m 4.58b 4.72b

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