Compass (NYSE:COMP – Get Free Report) and American Realty Investors (NYSE:ARL – Get Free Report) are both real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.
Insider & Institutional Ownership
67.0% of Compass shares are held by institutional investors. 2.9% of Compass shares are held by company insiders. Comparatively, 90.8% of American Realty Investors shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Risk and Volatility
Compass has a beta of 2.32, meaning that its stock price is 132% more volatile than the S&P 500. Comparatively, American Realty Investors has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Compass | $6.96 billion | 1.12 | -$58.50 million | $0.06 | 172.17 |
| American Realty Investors | $51.05 million | 5.11 | $15.70 million | $0.52 | 31.03 |
American Realty Investors has lower revenue, but higher earnings 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.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Compass and American Realty Investors, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Compass | 0 | 6 | 8 | 1 | 2.67 |
| American Realty Investors | 1 | 0 | 0 | 0 | 1.00 |
Compass presently has a consensus target price of $14.15, suggesting a potential upside of 37.02%. Given Compass’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Compass is more favorable than American Realty Investors.
Profitability
This table compares Compass and American Realty Investors’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Compass | 0.63% | 3.62% | 1.37% |
| American Realty Investors | 16.36% | -0.37% | -0.28% |
Summary
Compass beats American Realty Investors on 10 of the 15 factors compared between the two stocks.
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.
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.
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