Critical Review: Taylor Wimpey (OTCMKTS:TWODF) & Cavco Industries (NASDAQ:CVCO)

Cavco Industries (NASDAQ:CVCO) and Taylor Wimpey (OTCMKTS:TWODF) are both consumer cyclical companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Insider and Institutional Ownership

95.6% of Cavco Industries shares are owned by institutional investors. Comparatively, 39.9% of Taylor Wimpey shares are owned by institutional investors. 1.6% of Cavco Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Cavco Industries and Taylor Wimpey, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cavco Industries	0	0	2	0	3.00
Taylor Wimpey	0	1	0	0	2.00

Cavco Industries currently has a consensus price target of $423.50, suggesting a potential upside of 8.75%. Given Cavco Industries’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Cavco Industries is more favorable than Taylor Wimpey.

Profitability

This table compares Cavco Industries and Taylor Wimpey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cavco Industries	8.12%	14.30%	10.81%
Taylor Wimpey	N/A	N/A	N/A

Valuation and Earnings

This table compares Cavco Industries and Taylor Wimpey’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cavco Industries	$1.80 billion	1.79	$157.82 million	$18.35	21.22
Taylor Wimpey	N/A	N/A	N/A	$0.09	24.34

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

Summary

Cavco Industries beats Taylor Wimpey on 10 of the 11 factors compared between the two stocks.

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.

About Taylor Wimpey

Taylor Wimpey plc operates as a homebuilder in the United Kingdom and Spain. It builds and delivers various homes and communities. Taylor Wimpey plc was incorporated in 1935 and is based in High Wycombe, the United Kingdom.