Critical Analysis: The RMR Group (NASDAQ:RMR) & Jones Lang LaSalle (NYSE:JLL)

Jones Lang LaSalle (NYSE:JLL) and The RMR Group (NASDAQ:RMR) are both real estate companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Earnings and Valuation

This table compares Jones Lang LaSalle and The RMR Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jones Lang LaSalle	$28.20 billion	0.60	$792.10 million	$23.11	16.05
The RMR Group	$700.28 million	0.71	$17.60 million	$1.14	13.68

Jones Lang LaSalle has higher revenue and earnings than The RMR Group. The RMR Group is trading at a lower price-to-earnings ratio than Jones Lang LaSalle, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Jones Lang LaSalle and The RMR Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jones Lang LaSalle	0	3	4	1	2.75
The RMR Group	0	2	3	0	2.60

Jones Lang LaSalle currently has a consensus price target of $427.60, suggesting a potential upside of 15.28%. The RMR Group has a consensus price target of $21.33, suggesting a potential upside of 36.75%. Given The RMR Group’s higher probable upside, analysts plainly believe The RMR Group is more favorable than Jones Lang LaSalle.

Insider & Institutional Ownership

94.8% of Jones Lang LaSalle shares are owned by institutional investors. Comparatively, 42.3% of The RMR Group shares are owned by institutional investors. 0.9% of Jones Lang LaSalle shares are owned by insiders. Comparatively, 54.7% of The RMR Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Jones Lang LaSalle has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, The RMR Group has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares Jones Lang LaSalle and The RMR Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jones Lang LaSalle	3.89%	15.05%	6.42%
The RMR Group	3.10%	2.96%	1.71%

Dividends

Jones Lang LaSalle pays an annual dividend of $0.86 per share and has a dividend yield of 0.2%. The RMR Group pays an annual dividend of $1.80 per share and has a dividend yield of 11.5%. Jones Lang LaSalle pays out 3.7% of its earnings in the form of a dividend. The RMR Group pays out 157.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The RMR Group has raised its dividend for 1 consecutive years. The RMR Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Jones Lang LaSalle beats The RMR Group on 13 of the 18 factors compared between the two stocks.

About Jones Lang LaSalle

Jones Lang LaSalle Incorporated operates as a commercial real estate and investment management company. It engages in the buying, building, occupying, managing, and investing in a commercial, industrial, hotel, residential, and retail properties in Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a range of real estate services, including agency leasing, tenant representation, property management, advisory, and consulting services; and capital market services, such as equity and debt advisory, loan sales, equity advisory, loan servicing, merger and acquisition, corporate advisory, and investment sales and advisory services. It also provides on-site management services for office, industrial, retail, multifamily residential, and various other properties; integrated facilities management services; designing, building, management, and consulting services to tenants of leased space, owners in self-occupied buildings, and owners of real estate investments; and advisory, consulting, valuation, and energy and sustainability services. In addition, the company offers investment management services to institutional and retail investors, including high-net-worth individuals. It provides its services to real estate owners, occupiers, investors, and developers for various property types, including critical environments and data centers, offices, industrial and warehouses, residential properties, infrastructure projects, retail and shopping malls, logistics, and military housing and transportation centers; and hotels and hospitality, cultural, educational, government, healthcare and laboratory, and sports facilities. The company was formerly known as LaSalle Partners Incorporated and changed its name to Jones Lang LaSalle Incorporated in March 1999. Jones Lang LaSalle Incorporated was incorporated in 1997 and is headquartered in Chicago, Illinois.

About The RMR Group

The RMR Group Inc., through its subsidiary, The RMR Group LLC, provides asset management services in the United States. The company offers management services to its four publicly traded real estate investment trusts, three real estate operating companies, and private capital vehicles. It also provides advisory services to publicly traded mortgage real estate investment trust. The company was formerly known as REIT Management & Research Inc. and changed its name to The RMR Group Inc. in October 2015. The RMR Group Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.