The RMR Group (NASDAQ:RMR – Get Free Report) and Star (NASDAQ:STHO – Get Free Report) are both small-cap real estate companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.
Profitability
This table compares The RMR Group and Star’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| The RMR Group | 3.10% | 2.96% | 1.71% |
| Star | 14.77% | -0.90% | -0.45% |
Insider & Institutional Ownership
42.3% of The RMR Group shares are held by institutional investors. Comparatively, 89.3% of Star shares are held by institutional investors. 54.7% of The RMR Group shares are held by company insiders. Comparatively, 4.1% of Star shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| The RMR Group | $700.28 million | 0.88 | $17.60 million | $1.14 | 16.80 |
| Star | $57.67 million | 1.95 | -$64.25 million | $1.21 | 7.70 |
The RMR Group has higher revenue and earnings than Star. Star 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.
Volatility and Risk
The RMR Group has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Star has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and target prices for The RMR Group and Star, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| The RMR Group | 0 | 2 | 2 | 0 | 2.50 |
| Star | 0 | 1 | 0 | 0 | 2.00 |
The RMR Group currently has a consensus target price of $19.00, indicating a potential downside of 0.78%. Given The RMR Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe The RMR Group is more favorable than Star.
Summary
The RMR Group beats Star on 9 of the 14 factors compared between the two stocks.
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.
About Star
Star Holdings engages in the non-ground lease related commercial real estate businesses in the United States. Its portfolio primarily comprises interest in the Asbury Park Waterfront and Magnolia Green residential development projects. Star Holdings is based in New York, New York.
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