Head to Head Analysis: Garmin (NYSE:GRMN) vs. PulteGroup (NYSE:PHM)

PulteGroup (NYSE:PHM) and Garmin (NYSE:GRMN) are both large-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for PulteGroup and Garmin, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PulteGroup	0	9	12	1	2.64
Garmin	0	4	2	2	2.75

PulteGroup currently has a consensus price target of $138.82, suggesting a potential upside of 23.62%. Garmin has a consensus price target of $310.17, suggesting a potential upside of 12.48%. Given PulteGroup’s higher possible upside, analysts plainly believe PulteGroup is more favorable than Garmin.

Dividends

PulteGroup pays an annual dividend of $1.04 per share and has a dividend yield of 0.9%. Garmin pays an annual dividend of $4.20 per share and has a dividend yield of 1.5%. PulteGroup pays out 10.6% of its earnings in the form of a dividend. Garmin pays out 43.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. PulteGroup has raised its dividend for 7 consecutive years and Garmin has raised its dividend for 8 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

89.9% of PulteGroup shares are held by institutional investors. Comparatively, 81.6% of Garmin shares are held by institutional investors. 0.7% of PulteGroup shares are held by insiders. Comparatively, 14.8% of Garmin shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares PulteGroup and Garmin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PulteGroup	11.62%	15.21%	10.89%
Garmin	24.47%	20.95%	17.06%

Valuation & Earnings

This table compares PulteGroup and Garmin”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PulteGroup	$17.31 billion	1.22	$2.22 billion	$9.79	11.47
Garmin	$7.25 billion	7.34	$1.66 billion	$9.70	28.43

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

Volatility & Risk

PulteGroup has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Garmin has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Summary

Garmin beats PulteGroup on 10 of the 18 factors compared between the two stocks.

About PulteGroup

PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West brand names. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was founded in 1950 and is headquartered in Atlanta, Georgia.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.