American Realty Investors (NYSE:ARL – Get Free Report) and CoStar Group (NASDAQ:CSGP – Get Free Report) are both real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.
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 Recommendations
This is a summary of current recommendations and price targets for American Realty Investors and CoStar Group, as provided by MarketBeat.com.
| 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 |
Insider and Institutional 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 hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk and Volatility
American Realty Investors has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, CoStar Group has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.
Valuation & Earnings
This table compares American Realty Investors and CoStar Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Realty Investors | $51.05 million | 5.00 | $15.70 million | $0.52 | 30.39 |
| CoStar Group | $3.25 billion | 3.37 | $7.00 million | $0.19 | 142.26 |
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.
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.
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