FirstService (NASDAQ: FSV) and Kennedy-Wilson (NYSE:KW) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares FirstService and Kennedy-Wilson’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%
Kennedy-Wilson 1.94% 2.04% 0.60%

Dividends

FirstService pays an annual dividend of $0.49 per share and has a dividend yield of 0.7%. Kennedy-Wilson pays an annual dividend of $0.68 per share and has a dividend yield of 3.7%. FirstService pays out 39.5% of its earnings in the form of a dividend. Kennedy-Wilson pays out 523.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FirstService has increased its dividend for 6 consecutive years.

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, Kennedy-Wilson has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for FirstService and Kennedy-Wilson, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FirstService 0 6 0 0 2.00
Kennedy-Wilson 0 2 2 0 2.50

FirstService presently has a consensus price target of $66.50, suggesting a potential downside of 2.69%. Kennedy-Wilson has a consensus price target of $28.33, suggesting a potential upside of 52.33%. Given Kennedy-Wilson’s stronger consensus rating and higher possible upside, analysts clearly believe Kennedy-Wilson is more favorable than FirstService.

Institutional and Insider Ownership

61.2% of FirstService shares are held by institutional investors. Comparatively, 66.6% of Kennedy-Wilson shares are held by institutional investors. 17.1% of Kennedy-Wilson shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares FirstService and Kennedy-Wilson’s gross 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 55.11
Kennedy-Wilson $703.40 million 4.00 $5.59 million $0.13 143.09

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

Summary

FirstService beats Kennedy-Wilson on 9 of the 17 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.

Kennedy-Wilson Company Profile

Kennedy-Wilson Holdings, Inc. is a real estate investment company. The Company owns, operates, and invests in real estate both on its own and through its investment management platform. The Company focuses on multifamily and commercial properties located in the Western United States, the United Kingdom, Ireland, Spain, Italy and Japan. The Company’s segments include KW Investments, and KW Investment Management and Real Estate Services (IMRES). KW Investments invests in multifamily, residential and commercial properties, as well as loans secured by real estate. IMRES provides real estate-related services to investors and lenders, with a focus on financial institution-based clients. As of December 31, 2016, the Company had an ownership interest in approximately 39 million square feet of property globally, including 25,943 multifamily rental units.

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