American Realty Investors (NYSE:ARL – Get Free Report) and Legacy Housing (NASDAQ:LEGH – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.
Volatility and Risk
American Realty Investors has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Legacy Housing has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.
Earnings and Valuation
This table compares American Realty Investors and Legacy Housing”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Realty Investors | $47.32 million | 5.74 | -$14.70 million | $0.36 | 46.74 |
| Legacy Housing | $184.19 million | 2.90 | $61.64 million | $1.95 | 11.47 |
Legacy Housing has higher revenue and earnings than American Realty Investors. Legacy Housing is trading at a lower price-to-earnings ratio than American Realty Investors, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
89.4% of Legacy Housing shares are held by institutional investors. 90.8% of American Realty Investors shares are held by insiders. Comparatively, 30.1% of Legacy Housing shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares American Realty Investors and Legacy Housing’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Realty Investors | 11.74% | 0.33% | 0.25% |
| Legacy Housing | 26.66% | 9.47% | 8.80% |
Analyst Recommendations
This is a breakdown of recent ratings for American Realty Investors and Legacy Housing, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Realty Investors | 0 | 1 | 0 | 0 | 2.00 |
| Legacy Housing | 0 | 4 | 0 | 0 | 2.00 |
Legacy Housing has a consensus target price of $21.00, indicating a potential downside of 6.12%. Given Legacy Housing’s higher possible upside, analysts clearly believe Legacy Housing is more favorable than American Realty Investors.
Summary
Legacy Housing beats American Realty Investors on 9 of the 12 factors compared between the two stocks.
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.
About Legacy Housing
Legacy Housing Corporation engages in the building, sale, and financing of manufactured homes and tiny houses primarily in the southern United States. It manufactures and provides for the transport of mobile homes, including 1 to 5 bedrooms with 1 to 3 1/2 bathrooms; and provides wholesale financing to dealers and mobile home parks, as well as retail financing to consumers. The company also offers inventory financing for its independent retailers; consumer financing for its products; and financing to manufactured housing community owners that buy or lease its products for use in their rental housing communities. In addition, it involved in financing and developing new manufactured home communities. The company markets its homes under the Legacy brand through a network of independent retailers and company-owned stores; and directly to manufactured home communities. Legacy Housing Corporation was founded in 2005 and is headquartered in Bedford, Texas.
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