RMR Group (NASDAQ: RMR) and Transcontinental Realty Investors (NYSE:TCI) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.
Risk & Volatility
RMR Group has a beta of -0.71, suggesting that its stock price is 171% less volatile than the S&P 500. Comparatively, Transcontinental Realty Investors has a beta of -0.17, suggesting that its stock price is 117% less volatile than the S&P 500.
34.5% of RMR Group shares are owned by institutional investors. Comparatively, 2.0% of Transcontinental Realty Investors shares are owned by institutional investors. 55.3% of RMR Group shares are owned by company insiders. Comparatively, 87.7% of Transcontinental Realty Investors shares are owned 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.
Earnings & Valuation
This table compares RMR Group and Transcontinental Realty Investors’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|RMR Group||$271.73 million||3.39||$42.29 million||$2.63||23.14|
|Transcontinental Realty Investors||$118.47 million||2.45||$30,000.00||($0.68)||-48.97|
RMR Group has higher revenue and earnings than Transcontinental Realty Investors. Transcontinental Realty Investors is trading at a lower price-to-earnings ratio than RMR Group, indicating that it is currently the more affordable of the two stocks.
RMR Group pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. Transcontinental Realty Investors does not pay a dividend. RMR Group pays out 38.0% of its earnings in the form of a dividend.
This table compares RMR Group and Transcontinental Realty Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Transcontinental Realty Investors||-4.05%||-6.84%||-1.21%|
This is a breakdown of current ratings and recommmendations for RMR Group and Transcontinental Realty Investors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Transcontinental Realty Investors||0||0||0||0||N/A|
RMR Group presently has a consensus target price of $58.00, suggesting a potential downside of 4.68%. Given RMR Group’s higher possible upside, equities analysts plainly believe RMR Group is more favorable than Transcontinental Realty Investors.
RMR Group beats Transcontinental Realty Investors on 12 of the 15 factors compared between the two stocks.
About RMR Group
The RMR Group Inc. is a holding company. The Company’s business is primarily conducted by its subsidiary, The RMR Group LLC (RMR LLC). The Company’s segments include RMR LLC and All Other Operations. RMR LLC manages a portfolio of publicly owned real estate and real estate related businesses. RMR LLC manages Government Properties Income Trust, a real estate investment trust (REIT) that primarily owns properties that are leased to government tenants; Hospitality Properties Trust, an REIT that primarily owns hotels and travel centers; Select Income REIT, an REIT that primarily owns properties leased to single tenants across the United States and leased lands in Hawaii, and Senior Housing Properties Trust, an REIT that primarily owns senior living communities and medical office buildings. As of June 30, 2016, RMR LLC managed over 1,300 properties, which were located in 48 states, Washington, District of Columbia, Puerto Rico and Canada.
About Transcontinental Realty Investors
Transcontinental Realty Investors, Inc. is an externally advised and managed real estate investment company that owns a portfolio of income-producing properties and land held for development. The Company’s segments are Commercial Properties, Apartments, Land and Other. Its portfolio of income-producing properties includes residential apartment communities, office buildings and other commercial properties. It acquires land mainly in in-fill locations or suburban markets. The Company’s income-producing properties consist of approximately eight commercial properties, including five office buildings, two retail properties and an industrial warehouse, comprising in aggregate approximately 1.9 million square feet; a golf course comprising approximately 96.09 acres, and approximately 50 residential apartment communities comprising over 7,980 units, excluding apartments being developed. In addition, it owns approximately 3,660 acres of land held for development.
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