Reviewing Marcus & Millichap (NYSE:MMI) & Compass (NYSE:COMP)

Marcus & Millichap (NYSE:MMI) and Compass (NYSE:COMP) are both real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Institutional & Insider Ownership

62.8% of Marcus & Millichap shares are held by institutional investors. Comparatively, 67.0% of Compass shares are held by institutional investors. 39.2% of Marcus & Millichap shares are held by company insiders. Comparatively, 2.9% of Compass shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Marcus & Millichap and Compass’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marcus & Millichap	1.77%	2.97%	2.21%
Compass	0.63%	3.62%	1.37%

Risk & Volatility

Marcus & Millichap has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Compass has a beta of 2.32, suggesting that its stock price is 132% more volatile than the S&P 500.

Valuation and Earnings

This table compares Marcus & Millichap and Compass”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marcus & Millichap	$755.16 million	1.44	-$1.91 million	$0.37	77.64
Compass	$6.96 billion	1.04	-$58.50 million	$0.06	158.80

Marcus & Millichap has higher earnings, but lower revenue than Compass. Marcus & Millichap is trading at a lower price-to-earnings ratio than Compass, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Marcus & Millichap and Compass, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marcus & Millichap	1	1	0	0	1.50
Compass	0	6	8	1	2.67

Marcus & Millichap currently has a consensus price target of $28.00, indicating a potential downside of 2.52%. Compass has a consensus price target of $14.15, indicating a potential upside of 48.55%. Given Compass’ stronger consensus rating and higher probable upside, analysts plainly believe Compass is more favorable than Marcus & Millichap.

Summary

Compass beats Marcus & Millichap on 9 of the 15 factors compared between the two stocks.

About Marcus & Millichap

Marcus & Millichap, Inc. engages in the provision of investment real estate brokerage services. It specializes in commercial real estate investment sales, property financing, research, and advisory services. The company was founded by George M. Marcus and William A. Millichap in 1971 and is headquartered in Calabasas, CA.

About Compass

Compass, Inc. provides real estate brokerage services in the United States. It operates a cloud-based platform that provides an integrated suite of software for customer relationship management, marketing, client service, operations, and other functionality in the real estate industry. The company offers mobile apps that allow agents to manage their business anytime and anywhere, as well as designs consumer-grade user interfaces, automated and simplified workflows for agent-client interactions, and insight-rich dashboards and reports. It also provides full-service title and escrow/settlement services to real estate agents' clients, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans; and Compass Concierge, a program in which home sellers access to capital to front the cost of home improvement services. The company was formerly known as Urban Compass, Inc. and changed its name to Compass, Inc. in January 2021.Compass, Inc. was incorporated in 2012 and is headquartered in New York, New York.