LGI Homes (NASDAQ:LGIH) and Smith Douglas Homes (NYSE:SDHC) Financial Comparison

LGI Homes (NASDAQ:LGIH) and Smith Douglas Homes (NYSE:SDHC) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Institutional & Insider Ownership

84.9% of LGI Homes shares are owned by institutional investors. 12.4% of LGI Homes shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares LGI Homes and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LGI Homes	8.45%	11.28%	6.14%
Smith Douglas Homes	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent recommendations and price targets for LGI Homes and Smith Douglas Homes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LGI Homes	2	2	1	0	1.80
Smith Douglas Homes	0	5	1	0	2.17

LGI Homes presently has a consensus target price of $110.50, suggesting a potential upside of 12.34%. Smith Douglas Homes has a consensus target price of $27.70, suggesting a potential downside of 1.77%. Given LGI Homes’ higher possible upside, equities research analysts clearly believe LGI Homes is more favorable than Smith Douglas Homes.

Earnings & Valuation

This table compares LGI Homes and Smith Douglas Homes’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LGI Homes	$2.36 billion	0.98	$199.23 million	$8.42	11.68
Smith Douglas Homes	$764.63 million	0.33	N/A	N/A	N/A

LGI Homes has higher revenue and earnings than Smith Douglas Homes.

Summary

LGI Homes beats Smith Douglas Homes on 8 of the 9 factors compared between the two stocks.

About LGI Homes

LGI Homes, Inc. designs, constructs, and sells homes. It offers entry-level homes, such as attached and detached homes, and active adult homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. The company also engages in the wholesale business, which include building and selling homes to large institutions looking to acquire single-family rental properties. It serves customers in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland, and Utah. LGI Homes, Inc. was founded in 2003 and is headquartered in The Woodlands, Texas.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.