Head-To-Head Comparison: Lennar (NYSE:LEN) vs. Stanley Black & Decker (NYSE:SWK)

Lennar (NYSE:LEN) and Stanley Black & Decker (NYSE:SWK) are both large-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Lennar and Stanley Black & Decker, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	10	7	1	0	1.50
Stanley Black & Decker	1	6	3	0	2.20

Lennar presently has a consensus target price of $92.13, indicating a potential upside of 6.70%. Stanley Black & Decker has a consensus target price of $92.25, indicating a potential downside of 5.73%. Given Lennar’s higher possible upside, equities analysts clearly believe Lennar is more favorable than Stanley Black & Decker.

Institutional and Insider Ownership

81.1% of Lennar shares are owned by institutional investors. Comparatively, 87.8% of Stanley Black & Decker shares are owned by institutional investors. 10.1% of Lennar shares are owned by insiders. Comparatively, 0.7% of Stanley Black & Decker shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Lennar has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Dividends

Lennar pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. Stanley Black & Decker pays an annual dividend of $3.36 per share and has a dividend yield of 3.4%. Lennar pays out 31.3% of its earnings in the form of a dividend. Stanley Black & Decker pays out 82.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lennar has increased its dividend for 1 consecutive years and Stanley Black & Decker has increased its dividend for 58 consecutive years. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Lennar and Stanley Black & Decker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	4.93%	7.08%	4.61%
Stanley Black & Decker	4.07%	8.78%	3.73%

Earnings & Valuation

This table compares Lennar and Stanley Black & Decker”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennar	$34.19 billion	0.61	$2.08 billion	$6.39	13.51
Stanley Black & Decker	$15.25 billion	0.97	$401.90 million	$4.10	23.87

Lennar has higher revenue and earnings than Stanley Black & Decker. Lennar is trading at a lower price-to-earnings ratio than Stanley Black & Decker, indicating that it is currently the more affordable of the two stocks.

Summary

Lennar beats Stanley Black & Decker on 9 of the 17 factors compared between the two stocks.

About Lennar

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company’s homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land; and development, construction, and management of multifamily rental properties. It also offers residential mortgage financing, title, insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans. In addition, the company is involved in the fund investment activity. It primarily serves first-time, move-up, active adult, and luxury homebuyers. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

About Stanley Black & Decker

Stanley Black & Decker, Inc. engages in the provision of power and hand tools, and related accessories, products, services and equipment for oil and gas, infrastructure applications, commercial electronic security and monitoring systems, healthcare solutions, and mechanical access solutions. It operates through the Tools and Outdoor and Industrial segments. The Tools and Outdoor segment refers to power tools, hand tools, accessories and storage, and outdoor power equipment product lines. The Industrial segment includes the engineered fastening and infrastructure businesses. The company was founded by Frederick T. Stanley in 1843 and is headquartered in New Britain, CT.