HFF (NYSE: HF) and RE/MAX (NYSE:RMAX) are both small-cap financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares HFF and RE/MAX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HFF 15.20% 39.03% 8.30%
RE/MAX 12.45% 79.94% 11.81%

Dividends

RE/MAX pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. HFF does not pay a dividend. RE/MAX pays out 55.0% of its earnings in the form of a dividend. HFF has increased its dividend for 2 consecutive years.

Earnings & Valuation

This table compares HFF and RE/MAX’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HFF $517.43 million 3.32 $77.19 million $2.26 19.73
RE/MAX $176.30 million 4.80 $22.73 million $1.31 36.53

HFF has higher revenue and earnings than RE/MAX. HFF is trading at a lower price-to-earnings ratio than RE/MAX, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

HFF has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, RE/MAX has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

88.0% of HFF shares are held by institutional investors. 5.7% of HFF shares are held by company insiders. Comparatively, 0.6% of RE/MAX shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for HFF and RE/MAX, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HFF 1 2 0 0 1.67
RE/MAX 3 3 2 0 1.88

HFF currently has a consensus price target of $28.00, indicating a potential downside of 37.19%. RE/MAX has a consensus price target of $61.67, indicating a potential upside of 28.87%. Given RE/MAX’s stronger consensus rating and higher probable upside, analysts clearly believe RE/MAX is more favorable than HFF.

Summary

HFF beats RE/MAX on 9 of the 17 factors compared between the two stocks.

About HFF

HFF, Inc. is a holding company. The Company holds the partnership interests in Holliday Fenoglio Fowler, L.P. and HFF Securities L.P. (together, the Operating Partnerships), held through the subsidiary HFF Partnership Holdings, LLC, and all of the outstanding shares of Holliday GP Corp. (Holliday GP). The Company operates through the commercial real estate financial intermediary segment. It offers debt placement, investment sales, distressed debt and real estate owned advisory services, equity placement, investment banking and advisory services, loan sales and commercial loan servicing. Its fully-integrated national capital markets platform, coupled with its knowledge of the commercial real estate markets provides an range of capital markets services, including Debt placement; Investment sales; Distressed debt and real estate owned advisory services; Equity placement; Investment banking and advisory services; Loan sales; and Commercial loan servicing.

About RE/MAX

RE/MAX Holdings, Inc. is a franchisor in the real estate industry, franchising real estate brokerages around the world under the RE/MAX brand and mortgage brokerages within the United States under the Motto Mortgage brand. The Company is a franchised business, with all of the RE/MAX branded brokerage office locations being operated by franchisees, including RE/MAX, LLC, which owns the RE/MAX brand, and sells franchises and franchising rights; Independent Regional Franchise Owner, which owns rights to sell brokerage franchises in a specified region; Franchisee (or Broker-Owner), which operates a RE/MAX-branded brokerage office, lists properties and recruits agents, and Agent (or Sales Associate), including branded independent contractors operating out of local franchise brokerage offices. Under Motto business, the Company operates as a mortgage brokerage franchisor. As a franchisor, the Company helps its Motto franchisees to establish independent mortgage brokerage companies.

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