Analyzing Novation Companies (NOVC) & Newmark Group (NMRK)

Novation Companies (OTCMKTS:NOVC) and Newmark Group (NASDAQ:NMRK) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Valuation & Earnings

This table compares Novation Companies and Newmark Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Novation Companies $27.96 million 0.07 -$10.86 million N/A N/A
Newmark Group $1.60 billion 0.89 $144.49 million $1.15 7.94

Newmark Group has higher revenue and earnings than Novation Companies.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Novation Companies and Newmark Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novation Companies 0 0 0 0 N/A
Newmark Group 0 1 5 0 2.83

Newmark Group has a consensus price target of $18.50, suggesting a potential upside of 102.63%. Given Newmark Group’s higher possible upside, analysts plainly believe Newmark Group is more favorable than Novation Companies.

Profitability

This table compares Novation Companies and Newmark Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novation Companies -10.14% N/A -17.08%
Newmark Group 2.28% 54.81% 11.52%

Insider and Institutional Ownership

0.6% of Novation Companies shares are held by institutional investors. Comparatively, 13.2% of Newmark Group shares are held by institutional investors. 17.3% of Novation Companies shares are held by company insiders. Comparatively, 91.0% of Newmark Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Newmark Group pays an annual dividend of $0.36 per share and has a dividend yield of 3.9%. Novation Companies does not pay a dividend. Newmark Group pays out 31.3% of its earnings in the form of a dividend.

Summary

Newmark Group beats Novation Companies on 11 of the 12 factors compared between the two stocks.

Novation Companies Company Profile

Novation Companies, Inc., through its subsidiary, Healthcare Staffing, Inc., provides outsourced health care staffing and related services primarily to Community Service Boards in Georgia. It also owns a portfolio of mortgage securities. The company was formerly known as NovaStar Financial, Inc. and changed its name to Novation Companies, Inc. in May 2012. Novation Companies, Inc. was founded in 1996 and is based in Kansas City, Missouri.

Newmark Group Company Profile

Newmark Group, Inc. provides commercial real estate services in the United States and internationally. Its investor/owner services and products include capital markets, such as investment sales; and agency leasing, property management, valuation and advisory, and diligence and underwriting, as well as government sponsored enterprise lending, loan servicing, debt and structured finance, and loan sales under the Berkeley Point and NKF Capital Markets names. The company's occupier services and products comprise tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration, and facilities management. It provides its services to commercial real estate tenants, owner-occupiers, investors, and developers. As of March 9, 2018, Newmark Group, Inc. operated approximately 400 offices in 6 continents. The company was formerly known as Newmark Knight Frank and changed its name to Newmark Group, Inc. in October 2017. The company was founded in 1929 and is headquartered in New York, New York. Newmark Group, Inc. is a subsidiary of BGC Partners, Inc.

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