Taylor Morrison Home vs Toll Brothers Which Is More Promising?

Taylor Morrison Home Corporation and Toll Brothers, Inc. are two prominent companies in the residential construction industry, both specializing in building and selling single-family homes. Taylor Morrison focuses on entry-level and move-up buyers, while Toll Brothers caters to luxury home buyers. Both companies have experienced growth in recent years due to the strong demand for new homes in the United States. Investors looking to capitalize on the housing market may consider these two stocks for their portfolio.

Taylor Morrison Home or Toll Brothers?

When comparing Taylor Morrison Home and Toll Brothers, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Taylor Morrison Home and Toll Brothers.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Taylor Morrison Home has a dividend yield of -%, while Toll Brothers has a dividend yield of 0.65%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Taylor Morrison Home reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Toll Brothers reports a 5-year dividend growth of 15.15% year and a payout ratio of 5.88%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Taylor Morrison Home P/E ratio at 8.60 and Toll Brothers's P/E ratio at 8.96. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Taylor Morrison Home P/B ratio is 1.23 while Toll Brothers's P/B ratio is 1.84.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Taylor Morrison Home has seen a 5-year revenue growth of 0.81%, while Toll Brothers's is 0.93%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Taylor Morrison Home's ROE at 14.81% and Toll Brothers's ROE at 21.37%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $66.35 for Taylor Morrison Home and $138.12 for Toll Brothers. Over the past year, Taylor Morrison Home's prices ranged from $49.98 to $75.49, with a yearly change of 51.04%. Toll Brothers's prices fluctuated between $95.46 and $169.52, with a yearly change of 77.58%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.