Critical Survey: Meritage Homes (NYSE: MTH) and Second Street Capital (OTCMKTS: CTON)


Meritage Houses (NYSE: MTHGet a rating) and Second Street Capital (OTCMKTS: CTONGet a rating) are both construction companies, but which is the better investment? We’ll compare the two companies based on their dividend strength, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.

Valuation and benefits

This chart compares the revenue, earnings per share (EPS), and valuation of Meritage Homes and Second Street Capital.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Meritage Homes $5.14 billion 0.58 $737.44 million $21.65 3.78
Second Street Capital N / A N / A N / A N / A N / A

Meritage Homes has higher revenue and profits than Second Street Capital.

Analyst Notes

This is a breakdown of the current ratings and recommendations for Meritage Homes and Second Street Capital, as provided by MarketBeat.com.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Meritage Homes 1 4 4 0 2.33
Second Street Capital 0 0 0 0 N / A

Meritage Homes currently has a consensus price target of $110.25, suggesting a potential upside of 34.85%. Given Meritage Homes’ likely higher upside, research analysts clearly believe that Meritage Homes is more favorable than Second Street Capital.

Institutional and Insider Ownership

97.1% of Meritage Homes shares are held by institutional investors. 1.8% of Meritage Homes shares are held by insiders. By comparison, 71.9% of Second Street Capital’s stock is held by insiders. Strong institutional ownership indicates that large fund managers, hedge funds, and endowments believe a stock is poised for long-term growth.

Profitability

This table compares the net margins, return on equity and return on assets of Meritage Homes and Second Street Capital.

Net margins Return on equity return on assets
Meritage Homes 15.40% 28.21% 17.55%
Second Street Capital N / A N / A N / A

Volatility and risk

Meritage Homes has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500. Comparatively, Second Street Capital has a beta of 21.2, suggesting that its stock price stock is 2,020% more volatile than the S&P 500.

Summary

Meritage Homes beats Second Street Capital on 7 out of 9 factors compared between the two stocks.

Corporate Profile Meritage Homes (Get a rating)

Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family homes in the United States. The Company operates through two segments, residential construction and financial services. It acquires and develops land; and builds, markets and sells homes for first-time buyers and first-time buyers. The company also offers title insurance and closing/settlement services to its homebuyers. It builds and sells homes in Texas, Arizona, California, Colorado, Florida, North Carolina, South Carolina, Georgia and Tennessee under the Meritage Homes brand. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

Second Street Capital Company Profile (Get a rating)

Second Street Capital, Inc. operates as a specialty finance company in the United States. It provides asset-based loans to small and medium enterprises, export trading companies and small and medium-sized home builders, developers and investors. The company offers mortgage and asset-based loans with income participation, as well as preferred equity investments and senior secured loans. It also makes and manages investments in qualified real estate assets as principal and on behalf of institutional clients. The company was formerly known as Calton, Inc. and changed its name to Second Street Capital, Inc. in November 2011. Second Street Capital, Inc. was founded in 1969 and is headquartered in Fort Lauderdale, Utah. Florida.



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