LGI Homes, Inc. (LGIH) vs Meritage Homes Corporation (MTH)

LGI Homes, Inc. and Meritage Homes Corporation are both Residential Construction companies. Meritage Homes Corporation is the larger, with a market value of $4.0B against $1.1B — 3.8× the size. Meritage Homes Corporation trades at the lower P/E: 12.2× against 15.4×. Meritage Homes Corporation grew revenue faster over the last twelve months: −13.3% against −17.0%. Meritage Homes Corporation has the higher net margin (6.11% vs 3.89%) and the higher return on invested capital (3.99% vs 1.19%). Across the 22 metrics below, Meritage Homes Corporation leads on 15 and LGI Homes, Inc. on 7.

Valuation

Metric LGIH MTH Residential Construction median
P/E 15.38 12.23 13.02
P/S 0.60 0.72 0.96
P/B 0.48 0.76 1.10
Price to free cash flow 5.52 9.32 15.61
EV/EBITDA 34.13 11.88 10.61
EV/Sales 1.49 0.91 1.26
Earnings yield 6.50% 8.18% 7.32%
Free cash flow yield 18.11% 10.73% 6.22%

Profitability

Metric LGIH MTH Residential Construction median
Gross margin 19.50% 18.12% 22.30%
Operating margin 4.08% 7.22% 9.03%
Net margin 3.89% 6.11% 7.30%
Free cash flow margin 10.82% 7.70% 8.46%
Return on equity 3.16% 6.38% 9.84%
Return on assets 1.67% 4.30% 7.43%
Return on invested capital 1.19% 3.99% 6.90%

Growth

Metric LGIH MTH Residential Construction median
Revenue growth (TTM) (16.95%) (13.27%) (7.66%)
EPS growth (last fiscal year) (62.41%) (40.77%) (25.22%)
Revenue growth, 5-year CAGR (6.35%) 5.41% 8.74%
Net income growth, 5-year CAGR (25.86%) 1.36% 8.43%

Health

Metric LGIH MTH Residential Construction median
Debt to equity 0.74 0.37 0.20
Current ratio 17.74 1.97 3.56
Net debt to EBITDA 18.97 1.86 0.28

Dividend

Metric LGIH MTH Residential Construction median
Dividend yield — 3.18% 1.33%
Payout ratio — 0.39 0.17

Size

Metric LGIH MTH Residential Construction median
Market cap 1.05b 3.95b 3.95b

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