Gafisa (OTCMKTS:GFASY) versus Hovnanian Enterprises (NYSE:HOV) Head to Head Comparison

Gafisa (OTCMKTS:GFASY) and Hovnanian Enterprises (NYSE:HOV) are both small-cap construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Earnings & Valuation

This table compares Gafisa and Hovnanian Enterprises”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gafisa	N/A	N/A	N/A	N/A	N/A
Hovnanian Enterprises	$3.00 billion	0.19	$242.01 million	$28.55	3.35

Hovnanian Enterprises has higher revenue and earnings than Gafisa.

Profitability

This table compares Gafisa and Hovnanian Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gafisa	N/A	N/A	N/A
Hovnanian Enterprises	7.03%	33.18%	8.41%

Analyst Ratings

This is a summary of recent recommendations for Gafisa and Hovnanian Enterprises, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gafisa	0	0	0	0	0.00
Hovnanian Enterprises	1	1	0	0	1.50

Hovnanian Enterprises has a consensus target price of $120.00, suggesting a potential upside of 25.55%. Given Hovnanian Enterprises’ stronger consensus rating and higher probable upside, analysts clearly believe Hovnanian Enterprises is more favorable than Gafisa.

Volatility and Risk

Gafisa has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Hovnanian Enterprises has a beta of 2.14, indicating that its share price is 114% more volatile than the S&P 500.

Insider & Institutional Ownership

65.4% of Hovnanian Enterprises shares are owned by institutional investors. 3.1% of Gafisa shares are owned by company insiders. Comparatively, 19.8% of Hovnanian Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Hovnanian Enterprises beats Gafisa on 9 of the 9 factors compared between the two stocks.

About Gafisa

Gafisa S.A. operates as a development and construction company under the Gafisa brand name in Brazil. The company is involved in residential, commercial, and hotel projects. It also provides technical consultancy services, and real estate management and construction services to third parties. Gafisa S.A. was founded in 1954 and is headquartered in São Paulo, Brazil.

About Hovnanian Enterprises

Hovnanian Enterprises, Inc., through its subsidiaries, designs, constructs, markets, and sells residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans, title insurance, and homeowner’s insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.