Marcus & Millichap (NYSE:MMI) vs. Intergroup (NASDAQ:INTG) Critical Analysis

Intergroup (NASDAQ:INTG) and Marcus & Millichap (NYSE:MMI) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Profitability

This table compares Intergroup and Marcus & Millichap’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intergroup	-1.82%	N/A	-1.21%
Marcus & Millichap	-0.25%	0.20%	0.15%

Valuation & Earnings

This table compares Intergroup and Marcus & Millichap”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intergroup	$64.38 million	0.93	-$5.35 million	($0.57)	-48.68
Marcus & Millichap	$755.16 million	1.33	-$1.91 million	($0.04)	-644.08

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

Institutional & Insider Ownership

3.4% of Intergroup shares are owned by institutional investors. Comparatively, 62.8% of Marcus & Millichap shares are owned by institutional investors. 74.1% of Intergroup shares are owned by company insiders. Comparatively, 39.2% of Marcus & Millichap shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Intergroup and Marcus & Millichap, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intergroup	1	0	0	0	1.00
Marcus & Millichap	2	1	0	0	1.33

Marcus & Millichap has a consensus price target of $28.00, suggesting a potential upside of 8.68%. Given Marcus & Millichap’s stronger consensus rating and higher possible upside, analysts clearly believe Marcus & Millichap is more favorable than Intergroup.

Risk and Volatility

Intergroup has a beta of 0.2, meaning that its stock price is 80% less volatile than the S&P 500. Comparatively, Marcus & Millichap has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Summary

Marcus & Millichap beats Intergroup on 11 of the 13 factors compared between the two stocks.

About Intergroup

The InterGroup Corporation, through its subsidiaries, operates a hotel under the Hilton San Francisco Financial District name located in San Francisco, California. The company operates through three segments: Hotel Operations, Real Estate Operations, and Investment Transactions. Its hotel consists of guest rooms and luxury suites, a restaurant, a lounge, a private dining room, meeting room space, a gym, a grand ballroom, 5-level underground parking garage, a pedestrian bridge, and a Chinese culture center. The company also invests in income-producing instruments, corporate debt and equity securities, publicly traded investment funds, mortgage-backed securities, securities issued by REITs, and other companies that invest primarily in real estate. In addition, it owns, manages, and invests in apartment complexes, single-family houses as strategic investments, and commercial real estate property located in the United States, as well as owns unimproved land in Maui, Hawaii. The InterGroup Corporation was founded in 1965 and is based in Los Angeles, California.

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.