Hovnanian Enterprises (NYSE:HOV – Get Free Report) and Cavco Industries (NASDAQ:CVCO – Get Free Report) are both consumer cyclical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.
Profitability
This table compares Hovnanian Enterprises and Cavco Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hovnanian Enterprises | 8.02% | 54.85% | 10.21% |
| Cavco Industries | 8.12% | 14.30% | 10.81% |
Analyst Ratings
This is a summary of current ratings and recommmendations for Hovnanian Enterprises and Cavco Industries, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hovnanian Enterprises | 0 | 1 | 0 | 0 | 2.00 |
| Cavco Industries | 0 | 0 | 2 | 0 | 3.00 |
Valuation and Earnings
This table compares Hovnanian Enterprises and Cavco Industries’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hovnanian Enterprises | $2.84 billion | 0.50 | $205.89 million | $30.00 | 7.95 |
| Cavco Industries | $1.80 billion | 1.79 | $157.82 million | $18.35 | 21.22 |
Hovnanian Enterprises has higher revenue and earnings than Cavco Industries. Hovnanian Enterprises is trading at a lower price-to-earnings ratio than Cavco Industries, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
65.4% of Hovnanian Enterprises shares are held by institutional investors. Comparatively, 95.6% of Cavco Industries shares are held by institutional investors. 17.7% of Hovnanian Enterprises shares are held by insiders. Comparatively, 1.6% of Cavco Industries shares are held 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.
Risk and Volatility
Hovnanian Enterprises has a beta of 2.58, suggesting that its share price is 158% more volatile than the S&P 500. Comparatively, Cavco Industries has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
Summary
Cavco Industries beats Hovnanian Enterprises on 8 of the 14 factors compared between the two stocks.
About Hovnanian Enterprises
Hovnanian Enterprises, Inc., through its subsidiaries, designs, constructs, markets, and sells residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans, title insurance, and homeowner’s insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.
About Cavco Industries
Cavco Industries, Inc. designs, produces, and retails factory-built homes primarily in the United States. It operates in two segments, Factory-Built Housing and Financial Services. The company markets its factory-built homes under the Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry, and Solitaire brands. It produces park model RVs; vacation cabins; and factory-built commercial structures, including apartment buildings, condominiums, hotels, workforce housing, schools, and housing for the United States military troops. In addition, the company produces various modular homes, which include single and multi-section ranch, split-level, and Cape Cod style homes, as well as two- and three-story homes, and multi-family units. Further, it provides conforming and non-conforming mortgages and home-only loans to purchasers of various brands of factory-built homes sold by company-owned retail stores, as well as various independent distributors, builders, communities, and developers. Additionally, the company offers property and casualty insurance to owners of manufactured homes. It distributes its products through a network of independent and company-owned retailers, planned community operators, and residential developers. Cavco Industries, Inc. was founded in 1965 and is headquartered in Phoenix, Arizona.
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