Toll Brothers (NYSE:TOL) and Dream Finders Homes (NASDAQ:DFH) are both mid-cap construction companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.
Analyst Recommendations
This is a breakdown of current recommendations for Toll Brothers and Dream Finders Homes, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Toll Brothers | 4 | 5 | 7 | 0 | 2.19 |
| Dream Finders Homes | 1 | 3 | 0 | 0 | 1.75 |
Toll Brothers presently has a consensus price target of $61.38, suggesting a potential upside of 3.78%. Dream Finders Homes has a consensus price target of $20.00, suggesting a potential downside of 15.11%. Given Toll Brothers’ stronger consensus rating and higher probable upside, research analysts plainly believe Toll Brothers is more favorable than Dream Finders Homes.
Earnings and Valuation
This table compares Toll Brothers and Dream Finders Homes’ revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Toll Brothers | $7.08 billion | 1.03 | $446.62 million | $3.40 | 17.39 |
| Dream Finders Homes | $1.13 billion | 1.92 | $79.09 million | N/A | N/A |
Toll Brothers has higher revenue and earnings than Dream Finders Homes.
Profitability
This table compares Toll Brothers and Dream Finders Homes’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Toll Brothers | 7.00% | 11.07% | 4.96% |
| Dream Finders Homes | N/A | N/A | N/A |
Insider and Institutional Ownership
88.7% of Toll Brothers shares are owned by institutional investors. Comparatively, 7.0% of Dream Finders Homes shares are owned by institutional investors. 10.8% of Toll Brothers shares are owned by insiders. Comparatively, 75.9% of Dream Finders Homes shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
Toll Brothers beats Dream Finders Homes on 9 of the 11 factors compared between the two stocks.
About Toll Brothers
Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. The company operates in two segments, Traditional Home Building and Urban Infill. It also designs, builds, markets, and sells homes in urban infill markets through Toll Brothers City Living. In addition, the company develops, owns, and operates golf courses and country clubs; develops and sells land; and develops, operates, and rents apartments, as well as provides homeowners with home automation and technology options. Further, it owns and operates architectural, engineering, mortgage, title, landscaping, lumber distribution, house component assembly, and manufacturing operations. The company serves move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Horsham, Pennsylvania.
About Dream Finders Homes
Dream Finders Homes, Inc. operates as a holding company for Dream Finders Holdings LLC that engages in homebuilding business in the United States. The company designs, builds, and sells single family attached and detached homes in Jacksonville, Orlando, Denver, the Washington D.C. metropolitan area, and Austin, as well as in Charlotte and Raleigh. It also operates as a licensed home mortgage broker that underwrites, originates, and sells mortgages to Prime Lending; and provides insurance agency services, including closing, escrow, and title insurance. The company sells its homes through its sales representatives and independent real estate brokers. Dream Finders Homes, Inc. was founded in 2008 and is headquartered in Jacksonville, Florida.