Critical Survey: Smith Douglas Homes (SDHC) vs. Its Peers

Smith Douglas Homes (NYSE:SDHC) is one of 26 public companies in the “Operative builders” industry, but how does it contrast to its rivals? We will compare Smith Douglas Homes to similar businesses based on the strength of its valuation, dividends, risk, profitability, institutional ownership, analyst recommendations and earnings.

Insider & Institutional Ownership

89.0% of shares of all “Operative builders” companies are held by institutional investors. 18.7% of shares of all “Operative builders” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Smith Douglas Homes	$975.46 million	$123.18 million	10.45
Smith Douglas Homes Competitors	$6.34 billion	$777.96 million	7.06

Smith Douglas Homes’ rivals have higher revenue and earnings than Smith Douglas Homes. Smith Douglas Homes is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current recommendations for Smith Douglas Homes and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith Douglas Homes	1	4	0	0	1.80
Smith Douglas Homes Competitors	400	1882	1734	53	2.35

Smith Douglas Homes presently has a consensus target price of $24.60, indicating a potential upside of 33.74%. As a group, “Operative builders” companies have a potential upside of 32.85%. Given Smith Douglas Homes’ higher possible upside, analysts plainly believe Smith Douglas Homes is more favorable than its rivals.

Volatility & Risk

Smith Douglas Homes has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Smith Douglas Homes’ rivals have a beta of 2.56, indicating that their average share price is 156% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Smith Douglas Homes	4.60%	21.01%	16.10%
Smith Douglas Homes Competitors	9.23%	84.38%	10.92%

Summary

Smith Douglas Homes rivals beat Smith Douglas Homes on 10 of the 13 factors compared.

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.