Analyzing KE (NYSE:BEKE) and Compass (NYSE:COMP)

KE (NYSE:BEKE) and Compass (NYSE:COMP) are both real estate companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings and target prices for KE and Compass, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KE	0	1	6	1	3.00
Compass	0	6	10	1	2.71

KE presently has a consensus price target of $23.64, suggesting a potential upside of 31.01%. Compass has a consensus price target of $13.50, suggesting a potential upside of 48.43%. Given Compass’ higher probable upside, analysts plainly believe Compass is more favorable than KE.

Valuation & Earnings

This table compares KE and Compass”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KE	$13.52 billion	1.49	$428.13 million	$0.61	29.58
Compass	$6.96 billion	0.99	-$58.50 million	$0.06	151.58

KE has higher revenue and earnings than Compass. KE is trading at a lower price-to-earnings ratio than Compass, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

39.3% of KE shares are owned by institutional investors. Comparatively, 67.0% of Compass shares are owned by institutional investors. 6.8% of KE shares are owned by company insiders. Comparatively, 2.9% of Compass shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

KE has a beta of -0.26, suggesting that its share price is 126% less volatile than the S&P 500. Comparatively, Compass has a beta of 2.32, suggesting that its share price is 132% more volatile than the S&P 500.

Profitability

This table compares KE and Compass’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KE	5.38%	7.62%	4.38%
Compass	0.63%	3.62%	1.37%

Summary

KE beats Compass on 9 of the 14 factors compared between the two stocks.

About KE

KE Holdings Inc., through its subsidiaries, engages in operating an integrated online and offline platform for housing transactions and services in the People's Republic of China. It operates through four segments: Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging and Other Services. The company operates Beike, an integrated online and offline platform for housing transactions and services; Lianjia, a real estate brokerage branded store; Agent Cooperation Network, an operating system that fosters reciprocity and bonding among various service providers; and software-as-a-service systems. It also owns the Deyou brand for connected brokerage stores; and other brands. In addition, the company offers contract, secure payment, escrow, and other services. KE Holdings Inc. was founded in 2001 and is headquartered in Beijing, the People's Republic of China.

About Compass

Compass, Inc. provides real estate brokerage services in the United States. It operates a cloud-based platform that provides an integrated suite of software for customer relationship management, marketing, client service, operations, and other functionality in the real estate industry. The company offers mobile apps that allow agents to manage their business anytime and anywhere, as well as designs consumer-grade user interfaces, automated and simplified workflows for agent-client interactions, and insight-rich dashboards and reports. It also provides full-service title and escrow/settlement services to real estate agents' clients, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans; and Compass Concierge, a program in which home sellers access to capital to front the cost of home improvement services. The company was formerly known as Urban Compass, Inc. and changed its name to Compass, Inc. in January 2021.Compass, Inc. was incorporated in 2012 and is headquartered in New York, New York.