KB Home (KBH) vs LGI Homes, Inc. (LGIH)

KB Home and LGI Homes, Inc. are both Residential Construction companies. KB Home is the larger, with a market value of $2.9B against $1.1B — 2.5× the size. KB Home trades at the lower P/E: 13.3× against 17.5×. LGI Homes, Inc. grew revenue faster over the last twelve months: −17.0% against −20.8%. KB Home has the higher net margin (4.38% vs 3.89%) and the higher return on invested capital (4.60% vs 1.19%). Across the 22 metrics below, KB Home leads on 14 and LGI Homes, Inc. on 8.

Valuation

Metric KBH LGIH Residential Construction median
P/E 13.25 17.54 13.51
P/S 0.56 0.68 1.02
P/B 0.77 0.54 1.17
Price to free cash flow 8.12 6.30 16.79
EV/EBITDA 11.81 36.05 10.48
EV/Sales 0.86 1.57 1.31
Earnings yield 7.55% 5.70% 7.37%
Free cash flow yield 12.31% 15.87% 5.73%

Profitability

Metric KBH LGIH Residential Construction median
Gross margin 13.69% 19.50% 22.30%
Operating margin 5.18% 4.08% 9.03%
Net margin 4.38% 3.89% 7.30%
Free cash flow margin 0.00% 10.82% 8.46%
Return on equity 0.00% 3.16% 9.84%
Return on assets 3.25% 1.67% 7.43%
Return on invested capital 4.60% 1.19% 6.90%

Growth

Metric KBH LGIH Residential Construction median
Revenue growth (TTM) (20.80%) (16.95%) (7.37%)
EPS growth (last fiscal year) (27.22%) (62.41%) —
Revenue growth, 5-year CAGR 8.31% (6.35%) 8.74%
Net income growth, 5-year CAGR 7.65% (25.86%) 8.43%

Health

Metric KBH LGIH Residential Construction median
Debt to equity 0.00 0.74 0.20
Current ratio 2.07 17.74 3.56
Net debt to EBITDA 2.56 18.97 0.28

Dividend

Metric KBH LGIH Residential Construction median
Dividend yield 1.32% — 0.89%
Payout ratio 0.09 0.00 0.00

Size

Metric KBH LGIH Residential Construction median
Market cap 2.90b 1.14b 4.18b

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