Reviewing American Realty Investors (NYSE:ARL) & CoStar Group (NASDAQ:CSGP)

American Realty Investors (NYSE:ARL) and CoStar Group (NASDAQ:CSGP) are both real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Earnings and Valuation

This table compares American Realty Investors and CoStar Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Realty Investors	$50.01 million	5.23	$15.70 million	$0.52	31.14
CoStar Group	$3.25 billion	3.42	$7.00 million	$0.19	144.11

American Realty Investors has higher earnings, but lower revenue than CoStar Group. American Realty Investors is trading at a lower price-to-earnings ratio than CoStar Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

American Realty Investors has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, CoStar Group has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Profitability

This table compares American Realty Investors and CoStar Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Realty Investors	16.36%	-0.37%	-0.28%
CoStar Group	2.08%	3.74%	2.96%

Analyst Ratings

This is a summary of recent ratings and target prices for American Realty Investors and CoStar Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Realty Investors	1	0	0	0	1.00
CoStar Group	2	9	9	0	2.35

CoStar Group has a consensus target price of $40.11, indicating a potential upside of 46.48%. Given CoStar Group’s stronger consensus rating and higher possible upside, analysts clearly believe CoStar Group is more favorable than American Realty Investors.

Institutional & Insider Ownership

96.6% of CoStar Group shares are held by institutional investors. 90.8% of American Realty Investors shares are held by insiders. Comparatively, 1.2% of CoStar Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

CoStar Group beats American Realty Investors on 9 of the 14 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 CoStar Group

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. The company offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar Sales, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. It also provides Leasing, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. The company was founded in 1987 and is headquartered in Washington, the District of Columbia.