Critical Survey: Universal Electronics (NASDAQ:UEIC) and PulteGroup (NYSE:PHM)

Universal Electronics (NASDAQ:UEIC) and PulteGroup (NYSE:PHM) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Profitability

This table compares Universal Electronics and PulteGroup’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Electronics	-4.57%	2.70%	1.44%
PulteGroup	11.62%	15.21%	10.89%

Risk and Volatility

Universal Electronics has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, PulteGroup has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Valuation and Earnings

This table compares Universal Electronics and PulteGroup”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Electronics	$368.29 million	0.16	-$18.60 million	($1.16)	-3.84
PulteGroup	$16.41 billion	1.48	$2.22 billion	$9.79	13.27

PulteGroup has higher revenue and earnings than Universal Electronics. Universal Electronics is trading at a lower price-to-earnings ratio than PulteGroup, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Universal Electronics and PulteGroup, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Electronics	1	2	0	0	1.67
PulteGroup	0	5	13	0	2.72

Universal Electronics presently has a consensus target price of $4.25, indicating a potential downside of 4.49%. PulteGroup has a consensus target price of $144.13, indicating a potential upside of 10.96%. Given PulteGroup’s stronger consensus rating and higher probable upside, analysts clearly believe PulteGroup is more favorable than Universal Electronics.

Institutional and Insider Ownership

79.3% of Universal Electronics shares are owned by institutional investors. Comparatively, 89.9% of PulteGroup shares are owned by institutional investors. 17.1% of Universal Electronics shares are owned by company insiders. Comparatively, 0.7% of PulteGroup shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

PulteGroup beats Universal Electronics on 12 of the 13 factors compared between the two stocks.

About Universal Electronics

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.

About PulteGroup

PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West brand names. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was founded in 1950 and is headquartered in Atlanta, Georgia.