Head to Head Analysis: American Realty Investors (NYSE:ARL) & Compass (NYSE:COMP)

American Realty Investors (NYSE:ARL) and Compass (NYSE:COMP) are both real estate companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

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%

Risk & Volatility

American Realty Investors has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Compass has a beta of 2.32, suggesting that its share price is 132% more volatile than the S&P 500.

Insider & 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 large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares American Realty Investors and Compass”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Realty Investors	$50.01 million	5.17	$15.70 million	$0.52	30.81
Compass	$6.96 billion	1.06	-$58.50 million	$0.06	161.60

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.

Analyst Recommendations

This is a summary of current recommendations and price targets for American Realty Investors and Compass, as provided by MarketBeat.

	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 45.98%. Given Compass’ stronger consensus rating and higher possible upside, analysts clearly believe Compass is more favorable than American Realty Investors.

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.