KB Home (NYSE:KBH) & Lifetime Brands (NASDAQ:LCUT) Critical Review

KB Home (NYSE:KBH) and Lifetime Brands (NASDAQ:LCUT) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Valuation and Earnings

This table compares KB Home and Lifetime Brands”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KB Home	$6.24 billion	0.42	$428.79 million	$3.55	12.14
Lifetime Brands	$647.93 million	0.34	-$26.94 million	$1.43	6.66

KB Home has higher revenue and earnings than Lifetime Brands. Lifetime Brands is trading at a lower price-to-earnings ratio than KB Home, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

KB Home has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Lifetime Brands has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Dividends

KB Home pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Lifetime Brands pays an annual dividend of $0.17 per share and has a dividend yield of 1.8%. KB Home pays out 28.2% of its earnings in the form of a dividend. Lifetime Brands pays out 11.9% 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. KB Home has increased its dividend for 2 consecutive years. KB Home is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares KB Home and Lifetime Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KB Home	4.39%	6.56%	3.71%
Lifetime Brands	4.81%	26.39%	9.21%

Institutional and Insider Ownership

96.1% of KB Home shares are held by institutional investors. Comparatively, 40.6% of Lifetime Brands shares are held by institutional investors. 4.7% of KB Home shares are held by company insiders. Comparatively, 44.4% of Lifetime Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for KB Home and Lifetime Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KB Home	4	8	4	0	2.00
Lifetime Brands	0	2	1	1	2.75

KB Home currently has a consensus price target of $53.08, indicating a potential upside of 23.16%. Lifetime Brands has a consensus price target of $9.50, indicating a potential downside of 0.21%. Given KB Home’s higher probable upside, research analysts clearly believe KB Home is more favorable than Lifetime Brands.

Summary

KB Home beats Lifetime Brands on 11 of the 18 factors compared between the two stocks.

About KB Home

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.

About Lifetime Brands

Lifetime Brands, Inc. designs, sources, and sells branded kitchenware, tableware, and other products for use in the home in the worldwide. The company provides kitchenware products, including kitchen tools and gadgets, cutlery, kitchen scales, thermometers, cutting boards, shears, cookware, pantryware, spice racks, and bakeware; and tableware products comprising dinnerware, stemware, flatware, and giftware. It also provides home solutions, such as thermal beverageware, bath scales, weather and outdoor household, food storage, neoprene travel, and home décor products. The company owns or licenses various brands, including the Farberware, Mikasa, Taylor, KitchenAid, Pfaltzgraff, BUILT NY, Rabbit, Kamenstein, S’well, and Fred & Friends. It serves mass market merchants, specialty stores, department stores, warehouse clubs, grocery stores, off-price retailers, food service distributors, food and beverage outlets, and e-commerce. The company sells its products directly, as well as through its retail websites. Lifetime Brands, Inc. was founded in 1945 and is headquartered in Garden City, New York.