MTH vs TOL

For growth investors, Toll Brothers, Inc.

(TOL) is the stronger pick with 1. 1% revenue growth year-over-year, versus -8. 4% for Meritage Homes Corporation (MTH). Meritage Homes Corporation (MTH) offers the better valuation at 10. 1x trailing P/E (12. 9x forward), making it the more compelling value choice. Analysts rate Meritage Homes Corporation (MTH) a "Buy" — based on 38 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Meritage Homes Corporation (MTH) is the cheapest at 10.

1x versus Toll Brothers, Inc. at 10. 5x. On forward P/E, Toll Brothers, Inc. is actually cheaper at 11. 1x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Toll Brothers, Inc. wins at 0. 35x versus Meritage Homes Corporation's 4. 19x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Toll Brothers, Inc.

(TOL) delivered a total return of +122. 2%, compared to +23. 2% for Meritage Homes Corporation (MTH). Over 10 years, the gap is even starker: TOL returned +458. 1% versus MTH's +319. 4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Meritage Homes Corporation (MTH) is the lower-risk stock at 1.

17β versus Toll Brothers, Inc. 's 1. 21β — meaning TOL is approximately 3% more volatile than MTH relative to the S&P 500. On balance sheet safety, Toll Brothers, Inc. (TOL) carries a lower debt/equity ratio of 35% versus 36% for Meritage Homes Corporation — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Toll Brothers, Inc.

(TOL) is pulling ahead at 1. 1% versus -8. 4% for Meritage Homes Corporation (MTH). On earnings-per-share growth, the picture is similar: Toll Brothers, Inc. grew EPS -10. 1% year-over-year, compared to -40. 3% for Meritage Homes Corporation. Over a 3-year CAGR, TOL leads at 2. 2% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Toll Brothers, Inc.

(TOL) is the more profitable company, earning 12. 3% net margin versus 7. 7% for Meritage Homes Corporation — meaning it keeps 12. 3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: TOL leads at 15. 7% versus 9. 2% for MTH. At the gross margin level — before operating expenses — TOL leads at 26. 0%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Toll Brothers, Inc. (TOL) is the more undervalued stock at a PEG of 0. 35x versus Meritage Homes Corporation's 4. 19x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Toll Brothers, Inc. (TOL) trades at 11. 1x forward P/E versus 12. 9x for Meritage Homes Corporation — 1. 8x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for MTH: 28. 4% to $83. 25.

All stocks in this comparison pay dividends.

Meritage Homes Corporation (MTH) offers the highest yield at 2. 6%, versus 0. 7% for Toll Brothers, Inc. (TOL).

For long-horizon retirement investors, Toll Brothers, Inc.

(TOL) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 1. 21), 0. 7% yield, +458. 1% 10Y return). Both have compounded well over 10 years (TOL: +458. 1%, MTH: +319. 4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Consumer Cyclical sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.