American Realty Investors (NYSE:ARL) & Marcus & Millichap (NYSE:MMI) Head-To-Head Review

Marcus & Millichap (NYSE:MMI) and American Realty Investors (NYSE:ARL) are both small-cap real estate companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Valuation and Earnings

This table compares Marcus & Millichap and American Realty Investors”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marcus & Millichap	$755.16 million	1.57	-$1.91 million	$0.37	84.38
American Realty Investors	$50.01 million	4.98	$15.70 million	$0.52	29.64

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.

Analyst Recommendations

This is a summary of recent ratings for Marcus & Millichap and American Realty Investors, as reported by MarketBeat.

	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

Marcus & Millichap presently has a consensus target price of $28.00, suggesting a potential downside of 10.31%. Given Marcus & Millichap’s higher possible upside, analysts plainly believe Marcus & Millichap is more favorable than American Realty Investors.

Volatility and Risk

Marcus & Millichap has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, American Realty Investors has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

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%

Insider & Institutional Ownership

62.8% of Marcus & Millichap shares are held by institutional investors. 39.9% of Marcus & Millichap shares are held by company insiders. Comparatively, 90.8% of American Realty Investors shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

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.