Contrasting RE/MAX (NYSE:RMAX) and Tejon Ranch (NYSE:TRC)

RE/MAX (NYSE:RMAX) and Tejon Ranch (NYSE:TRC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Volatility and Risk

RE/MAX has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, Tejon Ranch has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Valuation & Earnings

This table compares RE/MAX and Tejon Ranch”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RE/MAX	$291.60 million	0.47	$8.15 million	$0.39	17.42
Tejon Ranch	$49.59 million	10.60	$80,000.00	$0.01	1,946.00

RE/MAX has higher revenue and earnings than Tejon Ranch. RE/MAX is trading at a lower price-to-earnings ratio than Tejon Ranch, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares RE/MAX and Tejon Ranch’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RE/MAX	2.80%	-73.77%	5.20%
Tejon Ranch	0.15%	0.02%	0.01%

Analyst Recommendations

This is a breakdown of current ratings and target prices for RE/MAX and Tejon Ranch, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RE/MAX	1	1	0	0	1.50
Tejon Ranch	1	0	0	0	1.00

RE/MAX currently has a consensus target price of $9.00, indicating a potential upside of 32.47%. Given RE/MAX’s stronger consensus rating and higher possible upside, research analysts clearly believe RE/MAX is more favorable than Tejon Ranch.

Insider and Institutional Ownership

93.2% of RE/MAX shares are held by institutional investors. Comparatively, 60.6% of Tejon Ranch shares are held by institutional investors. 6.8% of RE/MAX shares are held by company insiders. Comparatively, 21.9% of Tejon Ranch shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

RE/MAX beats Tejon Ranch on 9 of the 13 factors compared between the two stocks.

About RE/MAX

RE/MAX Holdings, Inc. operates as a franchisor of real estate brokerage services in the United States, Canada, and internationally. It operates through Real Estate, Mortgage, and Marketing Funds segments. The company offers real estate brokerage franchising services under the RE/MAX brand; mortgage brokerage services to real estate brokers, real estate professionals, mortgage professionals, and other investors under the Motto Mortgage brand; and mortgage loan processing software and services under the wemlo brand. It also provides kvCORE platform, which integrates a suite of digital products that enables agents, brokers, and teams to establish and manage client relationships; and RE/MAX University platform, a learning hub designed to help each agent in their professional expertise. The company was founded in 1973 and is headquartered in Denver, Colorado.

About Tejon Ranch

Tejon Ranch Co., together with its subsidiaries, operates as a diversified real estate development and agribusiness company. It operates through five segments: Commercial/Industrial Real Estate Development, Resort/Residential Real Estate Development, Mineral Resources, Farming, and Ranch Operations. The Commercial/Industrial Real Estate Development segment engages in the planning and permitting of land for development; construction of infrastructure projects, pre-leased buildings, and buildings to be leased or sold; and sale of land to third parties for their own development. It is also involved in the activities related to communications leases, a power plant lease, and landscape maintenance. This segment leases land to various auto service stations with convenience stores, fast-food operations, service diner-style restaurant, a motel, an antique shop, and a post office; various microwave repeater locations, radio and cellular transmitter sites, and fiber optic cable routes; and package of land for an electric power plant. The Resort/Residential Real Estate Development segment engages in land entitlement, planning, pre-construction engineering, stewardship, and conservation activities. The Mineral Resources segment includes oil and gas royalties, rock and aggregate royalties, and royalties from a cement operation leased to National Cement Company of California, Inc.; and the management of water assets and infrastructure projects. The Farming segment farms permanent crops, such as wine grapes, almonds, and pistachios in package of land. It also manages the farming of alfalfa and forage mix on package of land in the Antelope Valley; and leases package of land for growing vegetables, as well as almonds. The Ranch Operations segment provides game management and ancillary land services comprising grazing leases and filming, as well as various guided hunts. Tejon Ranch Co. was founded in 1843 and is based in Lebec, California.