RE/MAX Holdings (NYSE: RMAX) and Reis (NASDAQ:REIS) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

59.7% of Reis shares are held by institutional investors. 0.6% of RE/MAX Holdings shares are held by company insiders. Comparatively, 21.6% of Reis shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares RE/MAX Holdings and Reis’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RE/MAX Holdings $187.03 million 5.86 $95.88 million $1.31 47.29
Reis $46.93 million 4.55 $6.64 million $0.10 185.52

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

Profitability

This table compares RE/MAX Holdings and Reis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RE/MAX Holdings 12.45% 79.94% 11.81%
Reis 2.49% 1.20% 0.92%

Analyst Ratings

This is a summary of current recommendations and price targets for RE/MAX Holdings and Reis, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RE/MAX Holdings 2 3 1 0 1.83
Reis 0 0 2 0 3.00

RE/MAX Holdings currently has a consensus target price of $62.50, indicating a potential upside of 0.89%. Reis has a consensus target price of $24.50, indicating a potential upside of 32.08%. Given Reis’ stronger consensus rating and higher possible upside, analysts clearly believe Reis is more favorable than RE/MAX Holdings.

Dividends

RE/MAX Holdings pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Reis pays an annual dividend of $0.68 per share and has a dividend yield of 3.7%. RE/MAX Holdings pays out 55.0% of its earnings in the form of a dividend. Reis pays out 680.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RE/MAX Holdings has raised its dividend for 2 consecutive years.

Risk & Volatility

RE/MAX Holdings has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Reis has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Summary

RE/MAX Holdings beats Reis on 9 of the 17 factors compared between the two stocks.

About RE/MAX Holdings

RE/MAX Holdings, Inc. is a franchisor in the real estate industry, franchising real estate brokerages around the world under the RE/MAX brand and mortgage brokerages within the United States under the Motto Mortgage brand. The Company is a franchised business, with all of the RE/MAX branded brokerage office locations being operated by franchisees, including RE/MAX, LLC, which owns the RE/MAX brand, and sells franchises and franchising rights; Independent Regional Franchise Owner, which owns rights to sell brokerage franchises in a specified region; Franchisee (or Broker-Owner), which operates a RE/MAX-branded brokerage office, lists properties and recruits agents, and Agent (or Sales Associate), including branded independent contractors operating out of local franchise brokerage offices. Under Motto business, the Company operates as a mortgage brokerage franchisor. As a franchisor, the Company helps its Motto franchisees to establish independent mortgage brokerage companies.

About Reis

Reis, Inc. (Reis) is engaged in providing commercial real estate market information and analytical tools to real estate professionals, through its Reis Services subsidiary. The Company operates through Reis Services segment. It maintains a database containing detailed information on commercial properties in metropolitan markets and neighborhoods throughout the United States. The database contains information on apartment, office, retail, warehouse or distribution, flex or research and development, self-storage and seniors housing properties, and is used by real estate investors, lenders and other professionals to make informed buying, selling and financing decisions. Its product portfolio includes Reis Subscriber Edition (SE), its delivery platform aimed at larger and mid-sized enterprises; ReisReports, aimed at prosumers and smaller enterprises, and Mobiuss Portfolio CRE (Mobiuss), aimed at risk managers and credit administrators at banks and non-bank lending institutions.

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