Lennar Corporation (LEN.B) vs Meritage Homes Corporation (MTH)

Lennar Corporation and Meritage Homes Corporation are both Residential Construction companies. Lennar Corporation is the larger, with a market value of $38.8B against $4.2B — 9.2× the size. Lennar Corporation trades at the lower P/E: 12.6× against 13.5×. Lennar Corporation grew revenue faster over the last twelve months: −7.45% against −13.3%. Meritage Homes Corporation has the higher net margin (6.11% vs 4.88%) and the lower return on invested capital (3.99% vs 5.32%). Both pay a dividend; Lennar Corporation yields more (1.12% vs 0.74%). Across the 23 metrics below, Lennar Corporation leads on 14 and Meritage Homes Corporation on 9.

Valuation

Metric LEN.B MTH Residential Construction median
P/E 12.60 13.51 13.51
P/S 0.59 0.79 1.02
P/B 0.89 0.85 1.17
Price to free cash flow 22.99 10.30 16.79
EV/EBITDA 9.90 12.86 10.48
EV/Sales 0.66 0.99 1.31
Earnings yield 7.94% 7.40% 7.37%
Free cash flow yield 4.35% 9.71% 5.73%

Profitability

Metric LEN.B MTH Residential Construction median
Gross margin 8.15% 18.12% 22.30%
Operating margin 6.23% 7.22% 9.03%
Net margin 4.88% 6.11% 7.30%
Free cash flow margin 2.58% 7.70% 8.46%
Return on equity 7.19% 6.38% 9.84%
Return on assets 4.70% 4.30% 7.43%
Return on invested capital 5.32% 3.99% 6.90%

Growth

Metric LEN.B MTH Residential Construction median
Revenue growth (TTM) (7.45%) (13.27%) (7.37%)
EPS growth (last fiscal year) (44.23%) (40.77%) —
Revenue growth, 5-year CAGR 8.74% 5.41% 8.74%
Net income growth, 5-year CAGR (3.32%) 1.36% 8.43%

Health

Metric LEN.B MTH Residential Construction median
Debt to equity 0.19 0.37 0.20
Current ratio 4.91 1.97 3.56
Net debt to EBITDA 0.21 1.86 0.28

Dividend

Metric LEN.B MTH Residential Construction median
Dividend yield 1.12% 0.74% 0.89%
Payout ratio 0.11 0.02 0.00

Size

Metric LEN.B MTH Residential Construction median
Market cap 38.81b 4.20b 4.18b

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