Analyzing The RMR Group (RMR) & Gafisa (GFA)
The RMR Group (NASDAQ: RMR) and Gafisa (NYSE:GFA) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, profitability, earnings, institutional ownership and dividends.
The RMR Group pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Gafisa does not pay a dividend. The RMR Group pays out 36.0% of its earnings in the form of a dividend.
Risk and Volatility
The RMR Group has a beta of -0.71, indicating that its share price is 171% less volatile than the S&P 500. Comparatively, Gafisa has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for The RMR Group and Gafisa, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The RMR Group||0||3||2||0||2.40|
The RMR Group currently has a consensus price target of $59.50, suggesting a potential downside of 0.17%. Given The RMR Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe The RMR Group is more favorable than Gafisa.
Valuation and Earnings
This table compares The RMR Group and Gafisa’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|The RMR Group||$266.94 million||3.37||$37.24 million||$2.78||21.44|
|Gafisa||$263.80 million||0.66||-$333.60 million||($30.65)||-0.40|
The RMR Group has higher revenue and earnings than Gafisa. Gafisa is trading at a lower price-to-earnings ratio than The RMR Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
34.5% of The RMR Group shares are owned by institutional investors. Comparatively, 3.9% of Gafisa shares are owned by institutional investors. 55.3% of The RMR Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares The RMR Group and Gafisa’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The RMR Group||16.44%||10.14%||7.43%|
The RMR Group beats Gafisa on 13 of the 15 factors compared between the two stocks.
The 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.
Gafisa Company Profile
Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.
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