Marcus & Millichap (NYSE:MMI – Get Free Report) and American Realty Investors (NYSE:ARL – Get Free Report) are both small-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Profitability
This table compares Marcus & Millichap and American Realty Investors’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Marcus & Millichap | 1.77% | 2.97% | 2.21% |
| American Realty Investors | 16.36% | -0.37% | -0.28% |
Analyst Ratings
This is a summary of current recommendations and price targets for Marcus & Millichap and American Realty Investors, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Marcus & Millichap | 1 | 1 | 0 | 0 | 1.50 |
| American Realty Investors | 0 | 1 | 0 | 0 | 2.00 |
Earnings & Valuation
This table compares Marcus & Millichap and American Realty Investors”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Marcus & Millichap | $755.16 million | 1.60 | -$1.91 million | $0.37 | 86.14 |
| American Realty Investors | $50.01 million | 5.14 | $15.70 million | $0.52 | 30.62 |
American Realty Investors has lower revenue, but higher earnings than Marcus & Millichap. American Realty Investors is trading at a lower price-to-earnings ratio than Marcus & Millichap, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
62.8% of Marcus & Millichap shares are owned by institutional investors. 39.2% of Marcus & Millichap shares are owned by insiders. Comparatively, 90.8% of American Realty Investors shares are owned 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.
Volatility and Risk
Marcus & Millichap has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, American Realty Investors has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.
Summary
Marcus & Millichap beats American Realty Investors on 7 of the 13 factors compared between the two stocks.
About Marcus & Millichap
Marcus & Millichap, Inc. engages in the provision of investment real estate brokerage services. It specializes in commercial real estate investment sales, property financing, research, and advisory services. The company was founded by George M. Marcus and William A. Millichap in 1971 and is headquartered in Calabasas, CA.
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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