Gafisa (NYSE: GFA) and Comstock Holding Companies (NASDAQ:CHCI) are both small-cap construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Valuation & Earnings

This table compares Gafisa and Comstock Holding Companies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gafisa $263.80 million 0.66 -$333.60 million ($30.65) -0.40
Comstock Holding Companies $41.58 million 0.12 -$8.99 million ($1.58) -0.85

Comstock Holding Companies has lower revenue, but higher earnings than Gafisa. Comstock Holding Companies is trading at a lower price-to-earnings ratio than Gafisa, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Gafisa and Comstock Holding Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gafisa -195.79% -34.52% -11.97%
Comstock Holding Companies -14.02% -94.21% -7.85%

Analyst Ratings

This is a summary of current recommendations and price targets for Gafisa and Comstock Holding Companies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gafisa 2 0 0 0 1.00
Comstock Holding Companies 0 0 0 0 N/A

Insider and Institutional Ownership

3.9% of Gafisa shares are owned by institutional investors. Comparatively, 9.8% of Comstock Holding Companies shares are owned by institutional investors. 46.4% of Comstock Holding Companies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Gafisa has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500. Comparatively, Comstock Holding Companies has a beta of -0.37, indicating that its share price is 137% less volatile than the S&P 500.

Summary

Comstock Holding Companies beats Gafisa on 6 of the 10 factors compared between the two stocks.

Gafisa Company Profile

Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.

Comstock Holding Companies Company Profile

Comstock Holding Companies, Inc. (Comstock ), formerly Comstock Homebuilding Companies, Inc. is a diversified real estate development and services company focused on the Washington, D.C. metropolitan area. The Company builds a range of products including apartments, single-family homes, townhouses, mid-rise condominiums, high-rise multi-family condominiums and mixed-use (residential and commercial) developments. As of December 31, 2011, the Company had built and delivered more than 5,300 homes. The Company has built homes and apartment buildings in suburban communities, where it focuses on low density products. The Company’s apartment buildings are developed as rental properties to be held and operated for its own purposes, converted at some point to for-sale condominium units or sold on a merchant build basis. In March 7, 2012, Cascades II completed the sale of its Potomac Square Apartment project to an affiliate of CAPREIT Acquisition Corporation.

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