Critical Review: Koss (NASDAQ:KOSS) vs. Meritage Homes (NYSE:MTH)

Meritage Homes (NYSE:MTH) and Koss (NASDAQ:KOSS) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Profitability

This table compares Meritage Homes and Koss’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meritage Homes	6.11%	7.13%	4.83%
Koss	-3.00%	-1.29%	-1.06%

Insider and Institutional Ownership

98.4% of Meritage Homes shares are owned by institutional investors. Comparatively, 6.2% of Koss shares are owned by institutional investors. 2.5% of Meritage Homes shares are owned by insiders. Comparatively, 44.3% of Koss shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Meritage Homes and Koss”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meritage Homes	$5.86 billion	0.79	$453.01 million	$4.78	14.87
Koss	$13.02 million	2.55	-$880,000.00	($0.11)	-31.82

Meritage Homes has higher revenue and earnings than Koss. Koss is trading at a lower price-to-earnings ratio than Meritage Homes, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Meritage Homes and Koss, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meritage Homes	0	7	5	0	2.42
Koss	1	0	0	0	1.00

Meritage Homes currently has a consensus price target of $79.25, suggesting a potential upside of 11.51%. Given Meritage Homes’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Meritage Homes is more favorable than Koss.

Risk & Volatility

Meritage Homes has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, Koss has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Summary

Meritage Homes beats Koss on 11 of the 14 factors compared between the two stocks.

About Meritage Homes

Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family attached and detached homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for entry-level and first move-up buyers in Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company also offers title and escrow, mortgage, insurance, and closing/settlement services to its homebuyers. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

About Koss

Koss Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of stereo headphones and related accessories in the United States, the Czech Republic, Sweden, Canada, Korea, Republic of Belgium, Malaysia, and internationally. It offers high-fidelity headphones, wireless bluetooth headphones, wireless bluetooth speakers, computer headsets, telecommunications headsets, and active noise canceling headphones. The company sells its products through distributors, international distributors, audio specialty stores, the internet, national retailers, grocery stores, electronics retailers, and prisons under the Koss name, as well as private label. It sells its products to distributors for resale to school systems, as well as directly to other manufacturers. The company markets through domestic retail outlets and numerous retailers. It exports its products. Koss Corporation was founded in 1953 and is headquartered in Milwaukee, Wisconsin.