Redfin Corp (NASDAQ: RDFN) and Transcontinental Realty Investors (NYSE:TCI) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for Redfin Corp and Transcontinental Realty Investors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Redfin Corp 0 4 2 0 2.33
Transcontinental Realty Investors 0 3 0 0 2.00

Redfin Corp presently has a consensus price target of $27.00, indicating a potential upside of 17.19%. Transcontinental Realty Investors has a consensus price target of $20.33, indicating a potential downside of 4.22%. Given Redfin Corp’s stronger consensus rating and higher possible upside, research analysts plainly believe Redfin Corp is more favorable than Transcontinental Realty Investors.

Insider and Institutional Ownership

2.1% of Transcontinental Realty Investors shares are owned by institutional investors. 81.0% of Transcontinental Realty Investors shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Redfin Corp and Transcontinental Realty Investors’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Redfin Corp N/A N/A N/A N/A N/A
Transcontinental Realty Investors $121.84 million 1.52 $44.57 million ($2.01) -10.56

Transcontinental Realty Investors has higher revenue and earnings than Redfin Corp.

Profitability

This table compares Redfin Corp and Transcontinental Realty Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Redfin Corp N/A N/A N/A
Transcontinental Realty Investors -13.64% -7.61% -1.38%

Summary

Redfin Corp beats Transcontinental Realty Investors on 6 of the 9 factors compared between the two stocks.

About Redfin Corp

Redfin Corporation is engaged in providing residential real estate brokerage services. The customer can search for homes by neighborhood, city or MLS number, or can refine results using detailed parameters, such as price and number of beds or baths. The Company serves home buyers and sellers. The Company offers online tools to consumers, including Redfin Estimate, which is an automated home-valuation tool. The customer can search homes for sale in Austin, Atlanta, Baltimore, Boston, Charlotte, Chicago, Dallas, Denver, Fort Lauderdale, Houston, Lake Tahoe, Las Vegas, Los Angeles, Miami, Philadelphia, Phoenix, Portland, OR, Raleigh, San Antonio, San Diego, San Francisco, Sacramento, San Jose, Seattle and Washington. The Company serves over 80 metro areas across the United States.

About Transcontinental Realty Investors

Transcontinental Realty Investors, Inc. is an externally advised and managed real estate investment company that owns a portfolio of income-producing properties and land held for development. The Company’s segments are Commercial Properties, Apartments, Land and Other. Its portfolio of income-producing properties includes residential apartment communities, office buildings and other commercial properties. It acquires land mainly in in-fill locations or suburban markets. The Company’s income-producing properties consist of approximately eight commercial properties, including five office buildings, two retail properties and an industrial warehouse, comprising in aggregate approximately 1.9 million square feet; a golf course comprising approximately 96.09 acres, and approximately 50 residential apartment communities comprising over 7,980 units, excluding apartments being developed. In addition, it owns approximately 3,660 acres of land held for development.

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