RMR Group (NASDAQ: RMR) and Forestar Group (NYSE:FOR) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.
Insider and Institutional Ownership
34.4% of RMR Group shares are owned by institutional investors. Comparatively, 79.7% of Forestar Group shares are owned by institutional investors. 55.3% of RMR Group shares are owned by insiders. Comparatively, 3.1% of Forestar Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares RMR Group and Forestar Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares RMR Group and Forestar Group’s gross revenue, earnings per share (EPS) 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||23.12|
|Forestar Group||$197.31 million||4.71||$58.64 million||N/A||N/A|
Forestar Group has lower revenue, but higher earnings than RMR Group.
This is a breakdown of current ratings and target prices for RMR Group and Forestar Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
RMR Group currently has a consensus target price of $58.00, indicating a potential downside of 4.61%. Given RMR Group’s higher probable upside, equities research analysts clearly believe RMR Group is more favorable than Forestar Group.
RMR Group pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. Forestar Group does not pay a dividend. RMR Group pays out 38.0% of its earnings in the form of a dividend.
RMR Group beats Forestar Group on 8 of the 13 factors compared between the two stocks.
RMR Group Company Profile
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.
Forestar Group Company Profile
Forestar Group Inc. is a residential and mixed-use real estate development company. The Company operates through three segments. The Real Estate segment secures entitlements and develops infrastructure on its lands, for single-family residential and mixed-use communities. The Mineral resources segment is focused on its owned oil and gas mineral interests through promoting exploration, development and production activities. The Other segment manages its timber holdings, recreational leases and water resource initiatives. As of December 31, 2016, its core community development business had directly or through ventures interests in 50 residential and mixed-use projects consisting of 4,600 acres of real estate located in 10 states and 14 markets. As of December 31, 2016, its non-core assets included approximately 523,000 net acres of owned mineral assets, 19,000 acres of timberland and undeveloped land, four multifamily assets and approximately 20,000 acres of groundwater leases.
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