How Does Lennar Compare to Its Peers?

Lennar and its peers

An analysis of Lennar’s income statement in 3Q15 follows:

  • The net profit margins of Lennar (LEN), KB Home (KBH), D.R. Horton (DHI), PulteGroup (PHM) and NVR (NVR) are 8.96%, 1.54%, 7.50%, 8.07%, and 7.49%, respectively.
  • The EPS (earnings per share) of Lennar, KB Home, D.R. Horton, PulteGroup, and NVR are $0.96, $0.10, $0.60, $0.28, and $21.91, respectively.

How Does Lennar Compare to Its Peers?

An analysis of Lennar’s valuation follows:

  • The PE (price-to-earnings) ratios of Lennar, KB Home, D.R. Horton, PulteGroup, and NVR are 16.43x, 1.63x, 16.68x, 14.35x, and 20.86x, respectively.
  • The PBV (price-to-book value) ratios of Lennar, KB Home, D.R. Horton, PulteGroup, and NVR are 2.04x, 0.82x, 2x, 1.59x, and 5x, respectively.

According to the above findings, Lennar outperformed its peers based on the net profit margin, EPS, and PBV ratio.

ETFs that invest in Lennar 

The iShares Dow Jones US Home Construction ETF (ITB) invests 11.11% of its holdings in Lennar. ITB tracks a market-cap-weighted index of companies involved in the production and sale of material used in home construction.

The SPDR S&P Homebuilders ETF (XHB) invests 3.34% of its holdings in Lennar. XHB tracks a broad-based, equal-weighted index of US companies involved in the homebuilding industry.

The Guggenheim S&P 500 Pure Growth ETF (RPG) invests 2.10% of its holdings in Lennar. RPG tracks an index of primarily large and mid caps with strong characteristics. The index selects companies from the S&P 500 Index based on three growth factors.

Lennar compared to its ETFs

An analysis of Lennar’s price movement follows:

  • The YTD (year-to-date) price movements of Lennar, ITB, XHB, RPG are 15.42%, 8.72%, 7.88%, and 1.50%, respectively.

An analysis of Lennar’s valuation follows:

  • The PE ratios of Lennar, ITB, XHB, and RPG are 16.43x, 14.44x, 21.79x, and 24.75x, respectively.
  • The PBV ratios of Lennar, ITB, XHB, and RPG are 2.04x, 2.31x, 2.95x, and 4.30x, respectively.

According to the above findings, the ETFs outperformed Lennar based on the PE ratio and the PBV ratio. However, based on price movement, Lennar is way ahead of its ETFs.