SouFun Holdings Limited (NYSE: SFUN) and Altisource Portfolio Solutions (NASDAQ:ASPS) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations and price targets for SouFun Holdings Limited and Altisource Portfolio Solutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SouFun Holdings Limited 2 3 2 0 2.00
Altisource Portfolio Solutions 0 2 0 0 2.00

SouFun Holdings Limited currently has a consensus target price of $3.63, suggesting a potential upside of 0.44%. Altisource Portfolio Solutions has a consensus target price of $19.00, suggesting a potential downside of 14.49%. Given SouFun Holdings Limited’s higher probable upside, equities analysts clearly believe SouFun Holdings Limited is more favorable than Altisource Portfolio Solutions.

Profitability

This table compares SouFun Holdings Limited and Altisource Portfolio Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SouFun Holdings Limited -8.27% -14.64% -4.45%
Altisource Portfolio Solutions 0.60% 82.95% 8.76%

Institutional and Insider Ownership

46.2% of SouFun Holdings Limited shares are held by institutional investors. Comparatively, 54.9% of Altisource Portfolio Solutions shares are held by institutional investors. 6.8% of Altisource Portfolio Solutions 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.

Earnings & Valuation

This table compares SouFun Holdings Limited and Altisource Portfolio Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SouFun Holdings Limited $821.57 million 1.94 -$19.98 million ($0.06) -60.17
Altisource Portfolio Solutions $982.54 million 0.41 $148.76 million $0.28 79.36

Altisource Portfolio Solutions has higher revenue and earnings than SouFun Holdings Limited. SouFun Holdings Limited is trading at a lower price-to-earnings ratio than Altisource Portfolio Solutions, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

SouFun Holdings Limited has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Altisource Portfolio Solutions has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Summary

Altisource Portfolio Solutions beats SouFun Holdings Limited on 8 of the 12 factors compared between the two stocks.

About SouFun Holdings Limited

Fang Holdings Limited, formerly SouFun Holdings Limited, operates as a real estate Internet portal in China. The Company’s Websites and mobile applications support active online communities and networks of users seeking information on, and services for, the real estate and home-related sectors in China. The Company, through its Internet platform, is engaged in the development of transaction and financing platforms by offering direct sales services for new homes, online real estate brokerage services and financial services. The Company’s service offerings include marketing services, E-commerce services, listing services, Financial services and other value-added services. The Company provides secured loans in the form of entrusted loans and mortgage loans and unsecured loans primarily to home buyers, real estate developers and other borrowers that meet its credit assessment requirements.

About Altisource Portfolio Solutions

Altisource Portfolio Solutions S.A. is a marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries. The Company’s business processes, vendor and electronic payment management software and behavioral science-based analytics manage outcomes for marketplace participants. It operates through three segments: Mortgage Services, Financial Services and Technology Services. The Mortgage Services segment provides loan servicers, originators, rental property investors and real estate consumers with products, services and technologies. The Financial Services segment provides collection services to debt originators and servicers and customer relationship management services. The Technology Services segment provides software and data analytics solutions that support management of mortgage and real estate activities and marketplace transactions across mortgage and real estate lifecycles and information technology infrastructure management services.

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