RMR Group (NYSE: RMR) and Forestar Group (NYSE:FOR) are both small-cap financials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Earnings & Valuation

This table compares RMR Group and Forestar Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RMR Group $230.67 million 3.51 $154.37 million N/A N/A
Forestar Group $162.02 million 4.48 $34.63 million $2.08 8.32

RMR Group has higher revenue and earnings than Forestar Group.

Profitability

This table compares RMR Group and Forestar Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RMR Group 31.72% 18.72% 17.66%
Forestar Group 46.94% 8.75% 6.66%

Analyst Ratings

This is a summary of current ratings for RMR Group and Forestar Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RMR Group 0 2 2 0 2.50
Forestar Group 0 0 0 0 N/A

RMR Group currently has a consensus price target of $58.00, suggesting a potential upside of 15.31%. Given RMR Group’s higher possible upside, equities research analysts plainly believe RMR Group is more favorable than Forestar Group.

Insider & Institutional Ownership

85.1% of Forestar Group shares are owned by institutional investors. 3.1% of Forestar Group shares are owned 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.

Summary

RMR Group beats Forestar Group on 7 of the 11 factors compared between the two stocks.

About RMR Group

The RMR Group Inc. is a holding company. The Company’s business is primarily conducted by its subsidiary, The RMR Group LLC (RMR LLC). The Company’s segments include RMR LLC and All Other Operations. RMR LLC manages a portfolio of publicly owned real estate and real estate related businesses. RMR LLC manages Government Properties Income Trust, a real estate investment trust (REIT) that primarily owns properties that are leased to government tenants; Hospitality Properties Trust, an REIT that primarily owns hotels and travel centers; Select Income REIT, an REIT that primarily owns properties leased to single tenants across the United States and leased lands in Hawaii, and Senior Housing Properties Trust, an REIT that primarily owns senior living communities and medical office buildings. As of June 30, 2016, RMR LLC managed over 1,300 properties, which were located in 48 states, Washington, District of Columbia, Puerto Rico and Canada.

About Forestar Group

Forestar Group Inc. is a residential and mixed-use real estate development company. The Company operates through three segments. The Real Estate segment secures entitlements and develops infrastructure on its lands, for single-family residential and mixed-use communities. The Mineral resources segment is focused on its owned oil and gas mineral interests through promoting exploration, development and production activities. The Other segment manages its timber holdings, recreational leases and water resource initiatives. As of December 31, 2016, its core community development business had directly or through ventures interests in 50 residential and mixed-use projects consisting of 4,600 acres of real estate located in 10 states and 14 markets. As of December 31, 2016, its non-core assets included approximately 523,000 net acres of owned mineral assets, 19,000 acres of timberland and undeveloped land, four multifamily assets and approximately 20,000 acres of groundwater leases.

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