Toll Brothers (NYSE:TOL) and Boise Cascade (NYSE:BCC) are both mid-cap construction companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.
Profitability
This table compares Toll Brothers and Boise Cascade's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Toll Brothers | 6.31% | 9.42% | 4.15% |
Boise Cascade | 3.21% | 25.51% | 10.16% |
Volatility and Risk
Toll Brothers has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, Boise Cascade has a beta of 2.13, meaning that its stock price is 113% more volatile than the S&P 500.
Earnings & Valuation
This table compares Toll Brothers and Boise Cascade's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Toll Brothers | $7.08 billion | 0.88 | $446.62 million | $3.40 | 14.84 |
Boise Cascade | $4.64 billion | 0.42 | $80.93 million | $2.09 | 23.79 |
Toll Brothers has higher revenue and earnings than Boise Cascade. Toll Brothers is trading at a lower price-to-earnings ratio than Boise Cascade, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Toll Brothers and Boise Cascade, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Toll Brothers | 5 | 5 | 6 | 0 | 2.06 |
Boise Cascade | 0 | 1 | 2 | 0 | 2.67 |
Toll Brothers presently has a consensus price target of $52.5333, indicating a potential upside of 3.74%. Boise Cascade has a consensus price target of $48.6667, indicating a potential downside of 3.19%. Given Toll Brothers' higher probable upside, equities research analysts clearly believe Toll Brothers is more favorable than Boise Cascade.
Insider & Institutional Ownership
87.2% of Toll Brothers shares are owned by institutional investors. Comparatively, 93.8% of Boise Cascade shares are owned by institutional investors. 10.9% of Toll Brothers shares are owned by insiders. Comparatively, 1.4% of Boise Cascade shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Dividends
Toll Brothers pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. Boise Cascade pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Toll Brothers pays out 12.9% of its earnings in the form of a dividend. Boise Cascade pays out 19.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Toll Brothers has increased its dividend for 1 consecutive years and Boise Cascade has increased its dividend for 1 consecutive years. Toll Brothers is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Toll Brothers beats Boise Cascade on 11 of the 16 factors compared between the two stocks.