M/I Homes (NYSE:MHO) vs. Second Street Capital (OTCMKTS:CTON) Critical Review

M/I Homes (NYSE:MHOGet Rating) and Second Street Capital (OTCMKTS:CTONGet Rating) are both small-cap construction companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Insider & Institutional Ownership

89.6% of M/I Homes shares are held by institutional investors. 3.6% of M/I Homes shares are held by company insiders. Comparatively, 71.9% of Second Street Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares M/I Homes and Second Street Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
M/I Homes 11.23% 26.32% 13.46%
Second Street Capital N/A N/A N/A

Volatility and Risk

M/I Homes has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500. Comparatively, Second Street Capital has a beta of 21.2, meaning that its share price is 2,020% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for M/I Homes and Second Street Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
M/I Homes 0 0 1 0 3.00
Second Street Capital 0 0 0 0 N/A

M/I Homes presently has a consensus price target of $100.00, indicating a potential upside of 119.49%. Given M/I Homes’ higher probable upside, analysts plainly believe M/I Homes is more favorable than Second Street Capital.

Earnings & Valuation

This table compares M/I Homes and Second Street Capital’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
M/I Homes $3.75 billion 0.34 $396.87 million $14.81 3.08
Second Street Capital N/A N/A N/A N/A N/A

M/I Homes has higher revenue and earnings than Second Street Capital.

Summary

M/I Homes beats Second Street Capital on 7 of the 9 factors compared between the two stocks.

About M/I Homes

(Get Rating)

M/I Homes, Inc., together with its subsidiaries, operates as a builder of single-family homes in Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina, and Tennessee. The company operates through Northern Homebuilding, Southern Homebuilding, and Financial Services segments. It designs, constructs, markets, and sells single-family homes and attached townhomes to first-time, millennial, move-up, empty-nester, and luxury buyers under the M/I Homes brand name. The company also purchases undeveloped land to develop into developed lots for the construction of single-family homes, as well as for sale to others. In addition, it originates and sells mortgages; and serves as a title insurance agent by providing title insurance policies, examination, and closing services to purchasers of its homes. The company was formerly known as M/I Schottenstein Homes, Inc. and changed its name to M/I Homes, Inc. in January 2004. M/I Homes, Inc. was founded in 1976 and is based in Columbus, Ohio.

About Second Street Capital

(Get Rating)

Second Street Capital, Inc. operates as a specialty finance company in the United States. It provides asset based lending to small and medium sized businesses, export trading companies, and small and medium sized homebuilders, developers, and investors. The company offers revenue participation asset based and mortgage loans, as well as preferred equity investments and senior secured loans. It also makes and manages investments in qualified real estate related assets as a principal and on behalf of institutional clients. The company was formerly known as Calton, Inc. and changed its name to Second Street Capital, Inc. in November 2011. Second Street Capital, Inc. was founded in 1969 and is headquartered in Fort Lauderdale, Florida.

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