Contrasting Smith Douglas Homes (NYSE:SDHC) & Century Communities (NYSE:CCS)

Century Communities (NYSE:CCS) and Smith Douglas Homes (NYSE:SDHC) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Century Communities and Smith Douglas Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Century Communities	3	2	2	0	1.86
Smith Douglas Homes	1	7	1	0	2.00

Century Communities currently has a consensus target price of $63.00, indicating a potential upside of 11.87%. Smith Douglas Homes has a consensus target price of $11.38, indicating a potential upside of 16.07%. Given Smith Douglas Homes’ stronger consensus rating and higher probable upside, analysts clearly believe Smith Douglas Homes is more favorable than Century Communities.

Valuation and Earnings

This table compares Century Communities and Smith Douglas Homes”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Century Communities	$4.12 billion	0.39	$147.60 million	$3.75	15.02
Smith Douglas Homes	$971.12 million	0.51	$10.69 million	$0.72	13.61

Century Communities has higher revenue and earnings than Smith Douglas Homes. Smith Douglas Homes is trading at a lower price-to-earnings ratio than Century Communities, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Century Communities	2.86%	5.41%	3.01%
Smith Douglas Homes	0.64%	-0.19%	-0.14%

Volatility & Risk

Century Communities has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Institutional & Insider Ownership

99.5% of Century Communities shares are held by institutional investors. 13.7% of Century Communities shares are held by insiders. Comparatively, 84.2% of Smith Douglas Homes shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Century Communities beats Smith Douglas Homes on 10 of the 14 factors compared between the two stocks.

About Century Communities

Century Communities, Inc., together with its subsidiaries, engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. It is also involved in the entitlement and development of the underlying land; and provision of mortgage, title, and insurance services to its homebuyers. The company offers homes under the Century Communities and Century Complete brands. It sells homes through its sales representatives, retail studios, and internet, as well as through independent real estate brokers in 18 states in the United States. Century Communities, Inc. was founded in 2002 and is headquartered in Greenwood Village, Colorado.

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.