Contrasting Interface (NASDAQ:TILE) and Royalty Management (NASDAQ:RMCO)

Royalty Management (NASDAQ:RMCO) and Interface (NASDAQ:TILE) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Risk and Volatility

Royalty Management has a beta of -0.01, suggesting that its share price is 101% less volatile than the S&P 500. Comparatively, Interface has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500.

Profitability

This table compares Royalty Management and Interface’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royalty Management	-14.53%	-7.93%	-5.22%
Interface	10.10%	21.77%	11.18%

Insider and Institutional Ownership

67.2% of Royalty Management shares are owned by institutional investors. Comparatively, 98.3% of Interface shares are owned by institutional investors. 0.3% of Royalty Management shares are owned by insiders. Comparatively, 2.5% of Interface shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Royalty Management and Interface, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royalty Management	1	1	1	0	2.00
Interface	0	0	3	1	3.25

Interface has a consensus target price of $40.50, suggesting a potential upside of 16.60%. Given Interface’s stronger consensus rating and higher probable upside, analysts clearly believe Interface is more favorable than Royalty Management.

Dividends

Royalty Management pays an annual dividend of $0.01 per share and has a dividend yield of 0.4%. Interface pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Royalty Management pays out -16.7% of its earnings in the form of a dividend. Interface pays out 4.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Royalty Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Royalty Management and Interface”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royalty Management	$4.95 million	7.97	-$730,000.00	($0.06)	-43.33
Interface	$1.39 billion	1.45	$116.10 million	$2.47	14.06

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

Summary

Interface beats Royalty Management on 14 of the 17 factors compared between the two stocks.

About Royalty Management

Royalty Management Holding Corporation provides environmental consulting and services in the United States. It is also involved in investing or purchasing assets, such as real estate and mining permits, patents, intellectual property, and emerging technologies. The company was incorporated in 2021 and is based in Fishers, Indiana.

About Interface

Interface, Inc. designs, produces, and sells modular carpet products primarily worldwide. The company operates in two segments, Americas (AMS), and Europe, Africa, Asia and Australia (EAAA). The company offers modular carpets under the Interface and FLOR brand names; luxury vinyl tiles; carpet tiles under the CQuestGB name for use in commercial interiors, include offices, healthcare facilities, airports, educational and other institutions, hospitality spaces, and retail facilities, as well as residential interiors; and modular resilient flooring products. It also provides carpet replacement, installation, and maintenance services; and rubber flooring under the norament and noraplan brand names; as well as produces and sells an adapted version of its carpet tile for the healthcare facilities market. In addition, the company sells a proprietary antimicrobial chemical compound under the Intersept name; sells TacTiles, a carpet tile installation system, as well as various adhesives and products; and provides turnkey project management services for global accounts and other customers through its InterfaceSERVICES business. The company sells its products directly to end-users, as well as indirectly through independent contractors, installers, or distributors. Interface, Inc. was incorporated in 1973 and is headquartered in Atlanta, Georgia.