Financial Contrast: Fathom (NASDAQ:FTHM) versus Tejon Ranch (NYSE:TRC)

Tejon Ranch (NYSE:TRC) and Fathom (NASDAQ:FTHM) are both small-cap real estate companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Tejon Ranch and Fathom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tejon Ranch	10.62%	1.23%	0.95%
Fathom	-6.27%	-75.89%	-33.25%

Volatility & Risk

Tejon Ranch has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Fathom has a beta of 2.25, suggesting that its share price is 125% more volatile than the S&P 500.

Valuation and Earnings

This table compares Tejon Ranch and Fathom”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tejon Ranch	$49.59 million	8.83	$80,000.00	$0.23	70.42
Fathom	$420.48 million	0.02	-$20.31 million	($0.80)	-0.28

Tejon Ranch has higher earnings, but lower revenue than Fathom. Fathom is trading at a lower price-to-earnings ratio than Tejon Ranch, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

60.6% of Tejon Ranch shares are owned by institutional investors. Comparatively, 55.5% of Fathom shares are owned by institutional investors. 21.9% of Tejon Ranch shares are owned by insiders. Comparatively, 16.4% of Fathom shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Tejon Ranch and Fathom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tejon Ranch	0	1	0	0	2.00
Fathom	1	0	0	1	2.50

Fathom has a consensus target price of $2.50, suggesting a potential upside of 1,003.75%. Given Fathom’s stronger consensus rating and higher probable upside, analysts clearly believe Fathom is more favorable than Tejon Ranch.

Summary

Tejon Ranch beats Fathom on 9 of the 14 factors compared between the two stocks.

About Tejon Ranch

Tejon Ranch Co., together with its subsidiaries, operates as a diversified real estate development and agribusiness company. It operates through five segments: Commercial/Industrial Real Estate Development, Resort/Residential Real Estate Development, Mineral Resources, Farming, and Ranch Operations. The Commercial/Industrial Real Estate Development segment engages in the planning and permitting of land for development; construction of infrastructure projects, pre-leased buildings, and buildings to be leased or sold; and sale of land to third parties for their own development. It is also involved in the activities related to communications leases, a power plant lease, and landscape maintenance. This segment leases land to various auto service stations with convenience stores, fast-food operations, service diner-style restaurant, a motel, an antique shop, and a post office; various microwave repeater locations, radio and cellular transmitter sites, and fiber optic cable routes; and package of land for an electric power plant. The Resort/Residential Real Estate Development segment engages in land entitlement, planning, pre-construction engineering, stewardship, and conservation activities. The Mineral Resources segment includes oil and gas royalties, rock and aggregate royalties, and royalties from a cement operation leased to National Cement Company of California, Inc.; and the management of water assets and infrastructure projects. The Farming segment farms permanent crops, such as wine grapes, almonds, and pistachios in package of land. It also manages the farming of alfalfa and forage mix on package of land in the Antelope Valley; and leases package of land for growing vegetables, as well as almonds. The Ranch Operations segment provides game management and ancillary land services comprising grazing leases and filming, as well as various guided hunts. Tejon Ranch Co. was founded in 1843 and is based in Lebec, California.

About Fathom

Fathom Holdings Inc. provides a real estate services platform that integrates residential brokerage, mortgage, title, and insurance services in the United States. It operates through three segments: Real Estate Brokerage, Mortgage, and Technology. The Real Estate Brokerage segment provides real estate brokerage services. The Mortgage segment offers residential loan origination and underwriting services. The Technology segment provides Software as a Service solutions and data mining for third party customers. It offers access to various properties for sale or lease through its FathomRealty.com website to buyers, sellers, landlords, and tenants; insurance agency services; and title services. In addition, the company provides intelliAgent, a real estate technology platform that offers a suite of brokerage and agent level tools, technology, business processes, business intelligence and reporting, and training; transaction, personnel, customer relationship, and accounting management for agent transactions; and reporting, social media marketing, and other marketing and marketing repository services, as well as marketplace for add-on services and third-party technology. Its brands include Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, Verus Title, and Cornerstone. The company was founded in 2010 and is headquartered in Cary, North Carolina.