Critical Comparison: FirstService (FSV) versus E-House (EJ)

FirstService (NASDAQ: FSV) and E-House (NYSE:EJ) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for FirstService and E-House, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FirstService 0 6 0 0 2.00
E-House 0 0 0 0 N/A

FirstService currently has a consensus target price of $66.50, suggesting a potential downside of 2.42%. Given FirstService’s higher possible upside, equities research analysts plainly believe FirstService is more favorable than E-House.

Valuation & Earnings

This table compares FirstService and E-House’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FirstService $1.48 billion 1.65 $33.59 million $1.24 54.96
E-House N/A N/A N/A ($0.28) -24.25

FirstService has higher revenue and earnings than E-House. E-House is trading at a lower price-to-earnings ratio than FirstService, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares FirstService and E-House’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FirstService 2.74% 24.16% 5.65%
E-House -15.06% -15.54% -10.97%

Institutional & Insider Ownership

61.2% of FirstService shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

FirstService has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, E-House has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500.

Dividends

FirstService pays an annual dividend of $0.49 per share and has a dividend yield of 0.7%. E-House does not pay a dividend. FirstService pays out 39.5% of its earnings in the form of a dividend. FirstService has raised its dividend for 3 consecutive years.

Summary

FirstService beats E-House on 10 of the 12 factors compared between the two stocks.

FirstService Company Profile

Firstservice Corporation is a provider of residential property management and other essential property services to residential and commercial customers. The Company operates through two segments: FirstService Residential and FirstService Brands. FirstService Residential is a property manager and provides ancillary services in the areas of on-site staffing, including building engineering and maintenance, full-service amenity management, security, concierge and front desk personnel, and landscaping; banking and insurance products, and energy conservation and management solutions. FirstService Brands provides essential property services to residential and commercial customers in North America through franchise networks and Company-owned locations. The principal brands in this division include Paul Davis Restoration, California Closets, Certa Pro Painters, Pillar to Post Home Inspectors, Floor Coverings International, College Pro Painters, Century Fire Protection and Service America.

E-House Company Profile

E-House (China) Holdings Limited is a real estate services company. The Company’s segments include real estate online services, real estate brokerage services, real estate information and consulting services, community value-added services and other services. It provides real estate online services, including e-commerce, online advertising and listing services; real estate brokerage services, including primary real estate agency services and secondary real estate brokerage services; real estate information and consulting services; community value-added services, and other services, including real estate advertising services, real estate promotional event services and real estate financial services. It provides online-to-offline and real estate services. It offers real estate e-commerce, online advertising and online listing services through its online platform, which consists of local Websites covering over 260 cities and various mobile applications.

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