Compass (NYSE:COMP) versus FirstService (NASDAQ:FSV) Head-To-Head Analysis

FirstService (NASDAQ:FSV) and Compass (NYSE:COMP) are both mid-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Institutional and Insider Ownership

69.3% of FirstService shares are held by institutional investors. Comparatively, 67.0% of Compass shares are held by institutional investors. 2.9% of Compass shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares FirstService and Compass’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstService	2.88%	18.07%	5.59%
Compass	0.63%	3.62%	1.37%

Analyst Recommendations

This is a summary of current ratings for FirstService and Compass, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstService	0	3	8	0	2.73
Compass	0	6	8	1	2.67

FirstService presently has a consensus price target of $184.20, indicating a potential upside of 43.21%. Compass has a consensus price target of $14.15, indicating a potential upside of 50.49%. Given Compass’ higher possible upside, analysts clearly believe Compass is more favorable than FirstService.

Valuation and Earnings

This table compares FirstService and Compass”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstService	$5.50 billion	1.02	$145.05 million	$3.53	36.44
Compass	$6.96 billion	1.02	-$58.50 million	$0.06	156.75

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

Risk & Volatility

FirstService has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Compass has a beta of 2.32, meaning that its stock price is 132% more volatile than the S&P 500.

About FirstService

FirstService Corporation, together with its subsidiaries, provides residential property management and other essential property services to residential and commercial customers in the United States and Canada. It operates through two segments: FirstService Residential and FirstService Brands. The FirstService Residential segment offers services for private residential communities, such as condominiums, co-operatives, homeowner associations, master-planned communities, active adult and lifestyle communities, and various other residential developments. This segment provides a range of ancillary services, including on-site staffing for building engineering and maintenance, full-service amenity management, and security and concierge/front desk; and financial services comprising cash management, other banking transaction-related, and specialized property insurance brokerage. In addition, this segment offers energy management solutions and advisory services, and resale processing services. Its FirstService Brands segment operates and provides essential property services to residential and commercial customers through franchise networks; and company-owned operations, including California Closets, Paul Davis Restoration, and CertaPro Painters operations. It provides residential and commercial restoration, painting, and floor coverings design and installation services; custom-designed and installed closet, and home storage solutions; home inspection services; and fire protection and related services. This segment offers its services primarily under the Paul Davis Restoration, Roofing Corp of America, First Onsite property Restoration, Century Fire Protection, CertaPro Painters, California Closets, Pillar to Post Home Inspectors, and Floor Coverings International brand names. FirstService Corporation was incorporated in 1988 and is headquartered in Toronto, Canada.

About Compass

Compass, Inc. provides real estate brokerage services in the United States. It operates a cloud-based platform that provides an integrated suite of software for customer relationship management, marketing, client service, operations, and other functionality in the real estate industry. The company offers mobile apps that allow agents to manage their business anytime and anywhere, as well as designs consumer-grade user interfaces, automated and simplified workflows for agent-client interactions, and insight-rich dashboards and reports. It also provides full-service title and escrow/settlement services to real estate agents' clients, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans; and Compass Concierge, a program in which home sellers access to capital to front the cost of home improvement services. The company was formerly known as Urban Compass, Inc. and changed its name to Compass, Inc. in January 2021.Compass, Inc. was incorporated in 2012 and is headquartered in New York, New York.