Critical Survey: Medalist Diversified REIT (NASDAQ:MDRR) and RE/MAX (NYSE:RMAX)

RE/MAX (NYSE:RMAX) and Medalist Diversified REIT (NASDAQ:MDRR) are both small-cap real estate companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for RE/MAX and Medalist Diversified REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RE/MAX	1	0	1	0	2.00
Medalist Diversified REIT	0	1	0	0	2.00

RE/MAX presently has a consensus price target of $13.80, indicating a potential upside of 11.65%. Given RE/MAX’s higher possible upside, analysts clearly believe RE/MAX is more favorable than Medalist Diversified REIT.

Institutional & Insider Ownership

93.2% of RE/MAX shares are held by institutional investors. Comparatively, 17.4% of Medalist Diversified REIT shares are held by institutional investors. 6.8% of RE/MAX shares are held by insiders. Comparatively, 77.6% of Medalist Diversified REIT shares are held by 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.

Earnings and Valuation

This table compares RE/MAX and Medalist Diversified REIT”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RE/MAX	$291.60 million	0.90	$8.15 million	($0.42)	-29.43
Medalist Diversified REIT	$10.40 million	1.90	-$2.39 million	$3.83	3.16

RE/MAX has higher revenue and earnings than Medalist Diversified REIT. RE/MAX is trading at a lower price-to-earnings ratio than Medalist Diversified REIT, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

RE/MAX has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500. Comparatively, Medalist Diversified REIT has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares RE/MAX and Medalist Diversified REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RE/MAX	-3.04%	-81.65%	5.40%
Medalist Diversified REIT	80.24%	-15.18%	-6.46%

Summary

RE/MAX beats Medalist Diversified REIT on 7 of the 13 factors compared between the two stocks.

About RE/MAX

RE/MAX Holdings, Inc. operates as a franchisor of real estate brokerage services in the United States, Canada, and internationally. It operates through Real Estate, Mortgage, and Marketing Funds segments. The company offers real estate brokerage franchising services under the RE/MAX brand; mortgage brokerage services to real estate brokers, real estate professionals, mortgage professionals, and other investors under the Motto Mortgage brand; and mortgage loan processing software and services under the wemlo brand. It also provides kvCORE platform, which integrates a suite of digital products that enables agents, brokers, and teams to establish and manage client relationships; and RE/MAX University platform, a learning hub designed to help each agent in their professional expertise. The company was founded in 1973 and is headquartered in Denver, Colorado.

About Medalist Diversified REIT

Medalist Diversified REIT Inc. is a Virginia-based real estate investment trust that specializes in acquiring, owning and managing commercial real estate in the Southeast region of the U.S. The Company's strategy is to focus on commercial real estate which is expected to provide an attractive balance of risk and returns. Medalist utilizes a rigorous, consistent and replicable process for sourcing and conducting due diligence of acquisitions.