Smith Douglas Homes (NYSE:SDHC) versus United Homes Group (NASDAQ:UHG) Critical Analysis

United Homes Group (NASDAQ:UHG) and Smith Douglas Homes (NYSE:SDHC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

88.9% of United Homes Group shares are owned by institutional investors. 85.3% of United Homes Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares United Homes Group and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Homes Group	82.93%	-295.76%	32.12%
Smith Douglas Homes	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current ratings and target prices for United Homes Group and Smith Douglas Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Homes Group	0	0	0	0	N/A
Smith Douglas Homes	0	5	1	0	2.17

Smith Douglas Homes has a consensus target price of $27.10, indicating a potential upside of 18.86%. Given Smith Douglas Homes’ higher possible upside, analysts clearly believe Smith Douglas Homes is more favorable than United Homes Group.

Earnings and Valuation

This table compares United Homes Group and Smith Douglas Homes’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Homes Group	$421.47 million	0.66	$125.06 million	$5.68	1.02
Smith Douglas Homes	$764.63 million	1.53	$123.18 million	N/A	N/A

United Homes Group has higher earnings, but lower revenue than Smith Douglas Homes.

About United Homes Group

United Homes Group, Inc., a homebuilding company, engages in the design, building, and sale of homes in South Carolina, North Carolina, and Georgia. It provides detached single-family houses, as well as attached single-family houses, including duplex and town houses for entry-level buyers, first time move-ups, second time move-ups, third time move-ups, and custom builds. The company was founded in 2004 and is headquartered in Chapin, South Carolina.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.