Five Point (NYSE:FPH) vs. Stratus Properties (NASDAQ:STRS) Critical Review

Stratus Properties (NASDAQ:STRS) and Five Point (NYSE:FPH) are both small-cap real estate companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.

Profitability

This table compares Stratus Properties and Five Point’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stratus Properties	74.96%	6.28%	3.83%
Five Point	24.87%	1.26%	0.91%

Analyst Recommendations

This is a summary of current recommendations and price targets for Stratus Properties and Five Point, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stratus Properties	1	0	0	0	1.00
Five Point	1	0	0	0	1.00

Risk and Volatility

Stratus Properties has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Five Point has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Valuation and Earnings

This table compares Stratus Properties and Five Point”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stratus Properties	$28.66 million	4.85	$11.98 million	$2.64	6.58
Five Point	$118.00 million	5.30	$70.97 million	$0.39	10.84

Five Point has higher revenue and earnings than Stratus Properties. Stratus Properties is trading at a lower price-to-earnings ratio than Five Point, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

61.6% of Stratus Properties shares are held by institutional investors. Comparatively, 38.1% of Five Point shares are held by institutional investors. 10.0% of Stratus Properties shares are held by insiders. Comparatively, 20.9% of Five Point shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Five Point beats Stratus Properties on 6 of the 11 factors compared between the two stocks.

About Stratus Properties

Stratus Properties Inc., a real estate company, engages in the entitlement, development, management, leasing, and sale of multi and single family residential and commercial real estate properties in the Austin, Texas area and other select markets in Texas. The company operates in two segments, Real Estate Operations and Leasing Operations. Its leasing operations cover lease of space at retail and mixed-use and multi-family properties. The company was incorporated in 1992 and is headquartered in Austin, Texas.

About Five Point

Five Point Holdings, LLC, through its subsidiary, Five Point Operating Company, LP, owns and develops mixed-use and planned communities in Orange County, Los Angeles County, and San Francisco County. The company operates in four segments: Valencia, San Francisco, Great Park, and Commercial. It sells residential and commercial land sites to homebuilders, commercial developers, and commercial buyers; operates and owns a commercial office, research and development, medical campus, and other properties; and provides development and property management services. The company was formerly known as Newhall Holding Company, LLC and changed its name to Five Point Holdings, LLC in May 2016. Five Point Holdings, LLC was incorporated in 2009 and is headquartered in Irvine, California.