Critical Survey: Hovnanian Enterprises (NYSE:HOV) versus Bellway (OTCMKTS:BLWYF)

Hovnanian Enterprises (NYSE:HOV) and Bellway (OTCMKTS:BLWYF) are both consumer cyclical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Insider and Institutional Ownership

65.4% of Hovnanian Enterprises shares are owned by institutional investors. Comparatively, 49.3% of Bellway shares are owned by institutional investors. 17.7% of Hovnanian Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Hovnanian Enterprises and Bellway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hovnanian Enterprises	7.45%	58.22%	9.35%
Bellway	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and recommmendations for Hovnanian Enterprises and Bellway, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hovnanian Enterprises	0	0	0	0	N/A
Bellway	0	1	1	0	2.50

Earnings and Valuation

This table compares Hovnanian Enterprises and Bellway’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hovnanian Enterprises	$2.76 billion	0.34	$205.89 million	$27.81	5.48
Bellway	N/A	N/A	N/A	$1.56	21.75

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

Summary

Hovnanian Enterprises beats Bellway on 7 of the 9 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 Bellway

Bellway p.l.c., together with its subsidiaries, engages in the home building business in the United Kingdom. The company builds and sells homes ranging from one-bedroom apartments to six-bedroom family homes, as well as provides homes to housing associations for social housing. It offers homes under Bellway, Ashberry, and Bellway London brands. The company was founded in 1946 and is headquartered in Newcastle upon Tyne, the United Kingdom.