American Realty Investors (NYSE:ARL – Get Free Report) and Forestar Group (NYSE:FOR – Get Free Report) are both small-cap real estate companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.
Institutional & Insider Ownership
35.5% of Forestar Group shares are owned by institutional investors. 90.8% of American Realty Investors shares are owned by company insiders. Comparatively, 0.5% of Forestar Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations for American Realty Investors and Forestar Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Realty Investors | 1 | 0 | 0 | 0 | 1.00 |
| Forestar Group | 0 | 4 | 2 | 0 | 2.33 |
Volatility & Risk
American Realty Investors has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Forestar Group has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.
Profitability
This table compares American Realty Investors and Forestar Group’s 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% |
| Forestar Group | 9.88% | 9.42% | 5.36% |
Valuation and Earnings
This table compares American Realty Investors and Forestar Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Realty Investors | $50.01 million | 5.31 | $15.70 million | $0.52 | 31.61 |
| Forestar Group | $1.66 billion | 0.79 | $167.90 million | $3.33 | 7.71 |
Forestar Group has higher revenue and earnings than American Realty Investors. Forestar Group is trading at a lower price-to-earnings ratio than American Realty Investors, indicating that it is currently the more affordable of the two stocks.
Summary
Forestar Group beats American Realty Investors on 10 of the 14 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 Forestar Group
Forestar Group Inc. operates as a residential lot development company in the United States. The company acquires land and develops infrastructure for single-family residential communities. It sells its residential single-family finished lots to local, regional, and national homebuilders. The company was incorporated in 2005 and is headquartered in Arlington, Texas. Forestar Group Inc. operates as a subsidiary of D.R. Horton, Inc.
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