LRR Energy (NASDAQ:LRE) versus Marcus & Millichap (NYSE:MMI) Head-To-Head Comparison

LRR Energy (NASDAQ:LRE) and Marcus & Millichap (NYSE:MMI) are both small-cap real estate companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, profitability, dividends, analyst recommendations, risk, valuation and institutional ownership.

Volatility and Risk

LRR Energy has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, Marcus & Millichap has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500.

Earnings & Valuation

This table compares LRR Energy and Marcus & Millichap”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LRR Energy	$126.97 million	0.14	$5.67 million	N/A	N/A
Marcus & Millichap	$755.16 million	1.57	-$1.91 million	$0.37	84.38

LRR Energy has higher earnings, but lower revenue than Marcus & Millichap.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LRR Energy	N/A	N/A	N/A
Marcus & Millichap	1.77%	2.97%	2.21%

Insider & Institutional Ownership

62.8% of Marcus & Millichap shares are held by institutional investors. 39.9% of Marcus & Millichap 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for LRR Energy and Marcus & Millichap, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LRR Energy	1	0	0	0	1.00
Marcus & Millichap	1	1	0	0	1.50

Marcus & Millichap has a consensus target price of $28.00, indicating a potential downside of 10.31%. Given Marcus & Millichap’s stronger consensus rating and higher possible upside, analysts clearly believe Marcus & Millichap is more favorable than LRR Energy.

Summary

Marcus & Millichap beats LRR Energy on 9 of the 11 factors compared between the two stocks.

About LRR Energy

LRR Energy, L.P. (LRR Energy) operates, acquires, exploits and develops producing oil and natural gas properties in North America. The Company’s properties consist of onshore oil and natural gas properties. Its oil and natural gas properties include the Permian Basin region in West Texas and Southeast New Mexico, the Mid-Continent region in Oklahoma and East Texas, and the Gulf Coast region in Texas. As of December 31, 2014, the Company’s total estimated proved reserves were approximately 33.8 million barrels of oil equivalent (MMBoe), of which approximately 88% were proved developed reserves (approximately 73% proved developed producing and approximately 15% proved developed non-producing). The Company’s general partner is LRE GP, LLC.

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.