Critical Review: Century Communities (NYSE:CCS) and The Berkeley Group (OTCMKTS:BKGFF)

Century Communities (NYSE:CCS) and The Berkeley Group (OTCMKTS:BKGFF) are both consumer cyclical companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Dividends

Century Communities pays an annual dividend of $1.04 per share and has a dividend yield of 1.1%. The Berkeley Group pays an annual dividend of $1.80 per share and has a dividend yield of 2.9%. Century Communities pays out 11.5% of its earnings in the form of a dividend. The Berkeley Group pays out 68.8% 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.

Analyst Ratings

This is a breakdown of recent recommendations for Century Communities and The Berkeley Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Century Communities	0	1	1	0	2.50
The Berkeley Group	0	0	0	0	N/A

Century Communities currently has a consensus target price of $101.50, indicating a potential upside of 9.97%. Given Century Communities’ higher probable upside, equities analysts clearly believe Century Communities is more favorable than The Berkeley Group.

Earnings & Valuation

This table compares Century Communities and The Berkeley Group’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Century Communities	$4.08 billion	0.72	$259.22 million	$9.01	10.24
The Berkeley Group	N/A	N/A	N/A	$2.62	23.37

Century Communities has higher revenue and earnings than The Berkeley Group. Century Communities is trading at a lower price-to-earnings ratio than The Berkeley Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

99.5% of Century Communities shares are owned by institutional investors. Comparatively, 45.9% of The Berkeley Group shares are owned by institutional investors. 11.9% of Century Communities shares are owned 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.

Profitability

This table compares Century Communities and The Berkeley Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Century Communities	7.90%	14.00%	8.10%
The Berkeley Group	N/A	N/A	N/A

Summary

Century Communities beats The Berkeley Group on 10 of the 12 factors compared between the two stocks.

About Century Communities

Century Communities, Inc., together with its subsidiaries, engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. It is also involved in the entitlement and development of the underlying land; and provision of mortgage, title, and insurance services to its homebuyers. The company offers homes under the Century Communities and Century Complete brands. It sells homes through its sales representatives, retail studios, and internet, as well as through independent real estate brokers in 18 states in the United States. Century Communities, Inc. was founded in 2002 and is headquartered in Greenwood Village, Colorado.

About The Berkeley Group

The Berkeley Group Holdings plc, together with its subsidiaries, engages in the residential-led and mixed-use property development and ancillary activities in the United Kingdom. The company is involved in land selling activities. It operates under the Berkeley, St Edward, St George, St James, St Joseph, and St William brand names. The Berkeley Group Holdings plc was founded in 1976 and is headquartered in Cobham, the United Kingdom.