Five Point Holdings (NYSE: FPH) and The RMR Group (NASDAQ:RMR) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Profitability

This table compares Five Point Holdings and The RMR Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Point Holdings -18.83% -2.30% -1.68%
The RMR Group 16.44% 10.14% 7.43%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Five Point Holdings and The RMR Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Point Holdings 0 2 4 0 2.67
The RMR Group 0 3 2 0 2.40

Five Point Holdings currently has a consensus price target of $19.70, indicating a potential upside of 41.83%. The RMR Group has a consensus price target of $59.50, indicating a potential upside of 0.34%. Given Five Point Holdings’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Five Point Holdings is more favorable than The RMR Group.

Earnings & Valuation

This table compares Five Point Holdings and The RMR Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Five Point Holdings $39.36 million 50.74 -$33.26 million N/A N/A
The RMR Group $266.94 million 3.35 $37.24 million $2.77 21.41

The RMR Group has higher revenue and earnings than Five Point Holdings.

Dividends

The RMR Group pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Five Point Holdings does not pay a dividend. The RMR Group pays out 36.1% of its earnings in the form of a dividend.

Institutional and Insider Ownership

32.5% of Five Point Holdings shares are held by institutional investors. Comparatively, 34.5% of The RMR Group shares are held by institutional investors. 55.3% of The RMR Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

The RMR Group beats Five Point Holdings on 8 of the 13 factors compared between the two stocks.

About Five Point Holdings

Five Point Holdings, LLC, formerly Newhall Holding Company, LLC, is the owner and developer of mixed-use, planned communities in coastal California. The Company is primarily engaged in the business of planning and developing its three mixed-use, planned communities. It operates in three segments: Newhall, San Francisco and Great Park. Its three mixed-use, planned communities are: Newhall Ranch in Los Angeles County; The San Francisco Shipyard and Candlestick Point in the City of San Francisco; and Great Park Neighborhoods in Orange County. Newhall Ranch consists of approximately 15,000 acres in northern Los Angeles County. Newhall Ranch is designed to include approximately 21,500 home sites and approximately 11.5 million square feet of commercial space. The San Francisco Shipyard and Candlestick Point consists of approximately 800 acres of bay front property in the city of San Francisco. Great Park Neighborhoods consists of approximately 2,100 acres in Orange County, California.

About The RMR Group

The RMR Group Inc. is a holding company. The Company’s business is primarily conducted by its subsidiary, The RMR Group LLC (RMR LLC). The Company’s segments include RMR LLC and All Other Operations. RMR LLC manages a portfolio of publicly owned real estate and real estate related businesses. RMR LLC manages Government Properties Income Trust, a real estate investment trust (REIT) that primarily owns properties that are leased to government tenants; Hospitality Properties Trust, an REIT that primarily owns hotels and travel centers; Select Income REIT, an REIT that primarily owns properties leased to single tenants across the United States and leased lands in Hawaii, and Senior Housing Properties Trust, an REIT that primarily owns senior living communities and medical office buildings. As of June 30, 2016, RMR LLC managed over 1,300 properties, which were located in 48 states, Washington, District of Columbia, Puerto Rico and Canada.

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