Head-To-Head Contrast: Meritage Homes (NYSE:MTH) vs. Smith Douglas Homes (NYSE:SDHC)

Smith Douglas Homes (NYSE:SDHC) and Meritage Homes (NYSE:MTH) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Smith Douglas Homes	N/A	N/A	N/A
Meritage Homes	12.54%	17.63%	12.65%

Earnings & Valuation

This table compares Smith Douglas Homes and Meritage Homes’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith Douglas Homes	$764.63 million	0.34	$123.18 million	N/A	N/A
Meritage Homes	$6.14 billion	1.00	$738.75 million	$21.44	7.90

Meritage Homes has higher revenue and earnings than Smith Douglas Homes.

Institutional and Insider Ownership

98.4% of Meritage Homes shares are held by institutional investors. 2.0% of Meritage Homes shares are held by company 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.

Analyst Recommendations

This is a summary of current ratings and target prices for Smith Douglas Homes and Meritage Homes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith Douglas Homes	0	5	1	0	2.17
Meritage Homes	1	3	3	0	2.29

Smith Douglas Homes currently has a consensus target price of $27.70, suggesting a potential downside of 4.52%. Meritage Homes has a consensus target price of $172.67, suggesting a potential upside of 1.88%. Given Meritage Homes’ stronger consensus rating and higher possible upside, analysts plainly believe Meritage Homes is more favorable than Smith Douglas Homes.

Summary

Meritage Homes beats Smith Douglas Homes on 11 of the 11 factors compared between the two stocks.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.

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.