CoStar Group (NASDAQ:CSGP – Get Free Report) and American Realty Investors (NYSE:ARL – Get Free Report) are both real estate companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.
Volatility and Risk
CoStar Group has a beta of 0.75, suggesting that its share price is 25% less 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.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for CoStar Group and American Realty Investors, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CoStar Group | 2 | 9 | 9 | 0 | 2.35 |
| American Realty Investors | 1 | 0 | 0 | 0 | 1.00 |
Profitability
This table compares CoStar Group and American Realty Investors’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CoStar Group | 2.08% | 3.74% | 2.96% |
| American Realty Investors | 16.36% | -0.37% | -0.28% |
Institutional & Insider Ownership
96.6% of CoStar Group shares are owned by institutional investors. 1.2% of CoStar Group shares are owned by insiders. Comparatively, 90.8% of American Realty Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares CoStar Group and American Realty Investors”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CoStar Group | $3.25 billion | 3.37 | $7.00 million | $0.19 | 142.26 |
| American Realty Investors | $51.05 million | 5.00 | $15.70 million | $0.52 | 30.39 |
American Realty Investors has lower revenue, but higher earnings than CoStar Group. American Realty Investors is trading at a lower price-to-earnings ratio than CoStar Group, indicating that it is currently the more affordable of the two stocks.
Summary
CoStar Group beats American Realty Investors on 9 of the 14 factors compared between the two stocks.
About CoStar Group
CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. The company offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar Sales, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. It also provides Leasing, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. The company was founded in 1987 and is headquartered in Washington, the District of Columbia.
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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