Contrasting Daito Trust Construction (OTCMKTS:DIFTY) & FirstService (NASDAQ:FSV)

Daito Trust Construction (OTCMKTS:DIFTY) and FirstService (NASDAQ:FSV) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Daito Trust Construction and FirstService’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Daito Trust Construction	N/A	N/A	N/A
FirstService	2.92%	17.91%	5.58%

Institutional & Insider Ownership

69.3% of FirstService shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Daito Trust Construction has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, FirstService has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Daito Trust Construction and FirstService, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Daito Trust Construction	0	0	0	0	0.00
FirstService	0	3	8	0	2.73

FirstService has a consensus target price of $197.22, suggesting a potential upside of 42.06%. Given FirstService’s stronger consensus rating and higher probable upside, analysts plainly believe FirstService is more favorable than Daito Trust Construction.

Dividends

Daito Trust Construction pays an annual dividend of $0.08 per share and has a dividend yield of 1.7%. FirstService pays an annual dividend of $1.22 per share and has a dividend yield of 0.9%. Daito Trust Construction pays out 21.6% of its earnings in the form of a dividend. FirstService pays out 34.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. FirstService has increased its dividend for 7 consecutive years. Daito Trust Construction is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Daito Trust Construction and FirstService”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Daito Trust Construction	$13.18 billion	0.50	$657.86 million	$0.37	12.83
FirstService	$5.56 billion	1.15	$145.05 million	$3.54	39.22

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

Summary

FirstService beats Daito Trust Construction on 12 of the 16 factors compared between the two stocks.

About Daito Trust Construction

Daito Trust Construction Co.,Ltd. designs, constructs, and rents apartments and condominiums in Japan. It operates through three segments: Construction, Real Estate, and Finance. The company design and construct rental housing and other structure construction; ironwork and construction; building management and renovation, and whole building leasing; rental housing tenant guarantor services; advertising; and LP gas supply businesses. Further, the company operates day service centers and childcare facilities; operates hotels in Malaysia; and bridge financing for general contractors. Additionally, it sells short-term insurance; offers credit card settlements services; rental apartment and condominium brokering services; provides real estate management and asset succession consulting services; and offers document shipping and destruction, printing, and administrative services. The company also engages in development and sale of investment-type apartment properties, and management of facility reservation portal sites. Daito Trust Construction Co.,Ltd. was incorporated in 1974 and is headquartered in Tokyo, Japan.

About FirstService

FirstService Corporation, together with its subsidiaries, provides residential property management and other essential property services to residential and commercial customers in the United States and Canada. It operates through two segments: FirstService Residential and FirstService Brands. The FirstService Residential segment offers services for private residential communities, such as condominiums, co-operatives, homeowner associations, master-planned communities, active adult and lifestyle communities, and various other residential developments. This segment provides a range of ancillary services, including on-site staffing for building engineering and maintenance, full-service amenity management, and security and concierge/front desk; and financial services comprising cash management, other banking transaction-related, and specialized property insurance brokerage. In addition, this segment offers energy management solutions and advisory services, and resale processing services. Its FirstService Brands segment operates and provides essential property services to residential and commercial customers through franchise networks; and company-owned operations, including California Closets, Paul Davis Restoration, and CertaPro Painters operations. It provides residential and commercial restoration, painting, and floor coverings design and installation services; custom-designed and installed closet, and home storage solutions; home inspection services; and fire protection and related services. This segment offers its services primarily under the Paul Davis Restoration, Roofing Corp of America, First Onsite property Restoration, Century Fire Protection, CertaPro Painters, California Closets, Pillar to Post Home Inspectors, and Floor Coverings International brand names. FirstService Corporation was incorporated in 1988 and is headquartered in Toronto, Canada.