American Realty Investors (NYSE:ARL – Get Free Report) and Compass (NYSE:COMP – Get Free Report) are both real estate companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.
Profitability
This table compares American Realty Investors and Compass’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Realty Investors | 16.36% | -0.37% | -0.28% |
| Compass | 0.63% | 3.62% | 1.37% |
Insider and Institutional Ownership
67.0% of Compass shares are owned by institutional investors. 90.8% of American Realty Investors shares are owned by insiders. Comparatively, 2.9% of Compass shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Realty Investors | 1 | 0 | 0 | 0 | 1.00 |
| Compass | 0 | 6 | 8 | 1 | 2.67 |
Compass has a consensus price target of $14.15, indicating a potential upside of 37.02%. Given Compass’ stronger consensus rating and higher probable upside, analysts clearly believe Compass is more favorable than American Realty Investors.
Valuation and Earnings
This table compares American Realty Investors and Compass”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Realty Investors | $51.05 million | 5.11 | $15.70 million | $0.52 | 31.03 |
| Compass | $6.96 billion | 1.12 | -$58.50 million | $0.06 | 172.17 |
American Realty Investors has higher earnings, but lower revenue than Compass. American Realty Investors is trading at a lower price-to-earnings ratio than Compass, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
American Realty Investors has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Compass has a beta of 2.32, meaning that its stock price is 132% more volatile than the S&P 500.
Summary
Compass beats American Realty Investors on 10 of the 15 factors compared between the two stocks.
About American Realty Investors
American Realty Investors, Inc., together with its subsidiaries, acquires, develops, owns, and manages multifamily and commercial real estate properties in the Southern United States. It operates through two segments, Residential and Commercial. The company leases apartment units to residents; and office, industrial, and retail space to various for-profit businesses, as well as local, state, and federal agencies. It also offers tenant services, including parking and storage space rental; and sells land and properties. The company was incorporated in 1999 and is based in Dallas, Texas. American Realty Investors, Inc. is a subsidiary of Realty Advisors, Inc.
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.
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