Five Point (NYSE: FPH) and FirstService (NASDAQ:FSV) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Five Point and FirstService’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Point 52.52% -1.84% -1.30%
FirstService 3.11% 29.64% 6.99%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Five Point and FirstService, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Point 0 2 4 0 2.67
FirstService 0 5 0 0 2.00

Five Point currently has a consensus target price of $19.90, indicating a potential upside of 41.03%. FirstService has a consensus target price of $69.33, indicating a potential downside of 1.25%. Given Five Point’s stronger consensus rating and higher possible upside, analysts clearly believe Five Point is more favorable than FirstService.

Dividends

FirstService pays an annual dividend of $0.54 per share and has a dividend yield of 0.8%. Five Point does not pay a dividend. FirstService pays out 26.6% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Five Point and FirstService’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Five Point $139.43 million 14.55 $73.23 million ($0.61) -23.13
FirstService $1.71 billion 1.42 $53.07 million $2.03 34.59

Five Point has higher earnings, but lower revenue than FirstService. Five Point is trading at a lower price-to-earnings ratio than FirstService, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

34.1% of Five Point shares are owned by institutional investors. Comparatively, 65.7% of FirstService shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Five Point beats FirstService on 7 of the 13 factors compared between the two stocks.

Five Point Company Profile

Five Point Holdings, LLC, through its subsidiary, Five Point Operating Company, LP, plans, develops, and owns mixed-use communities in California, the United States. It sells residential and commercial land sites to homebuilders, commercial developers, and commercial buyers. The company was formerly known as Newhall Holding Company, LLC and changed its name to Five Point Holdings, LLC in May 2016. Five Point Holdings, LLC was founded in 2009 and is based in Aliso Viejo, California.

FirstService Company Profile

FirstService Corp. engages in the provision of property services. It operates through the FirstService Residential, and FirstService Brands segments. The FirstService Residential segment offers property management services in North America. The FirstService Brands segment covers residential and commercial customers through both franchise systems, and company-owned operations. The company was founded by Jay S. Hennick in 1989 and is headquartered in Toronto, Canada.

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