Compass (NYSE:COMP) versus Howard Hughes (NYSE:HHH) Critical Analysis

Compass (NYSE:COMP) and Howard Hughes (NYSE:HHH) are both real estate companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Risk & Volatility

Compass has a beta of 2.36, suggesting that its stock price is 136% more volatile than the S&P 500. Comparatively, Howard Hughes has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Insider & Institutional Ownership

67.0% of Compass shares are held by institutional investors. Comparatively, 93.8% of Howard Hughes shares are held by institutional investors. 2.9% of Compass shares are held by company insiders. Comparatively, 48.0% of Howard Hughes shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Compass	0.63%	3.62%	1.37%
Howard Hughes	12.31%	10.19%	2.96%

Earnings and Valuation

This table compares Compass and Howard Hughes”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass	$6.96 billion	N/A	-$58.50 million	$0.06	212.25
Howard Hughes	$1.47 billion	2.75	$131.88 million	$4.94	13.77

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

Analyst Recommendations

This is a breakdown of current recommendations for Compass and Howard Hughes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass	1	5	8	1	2.60
Howard Hughes	1	2	0	0	1.67

Compass presently has a consensus price target of $14.15, suggesting a potential upside of 11.14%. Howard Hughes has a consensus price target of $79.00, suggesting a potential upside of 16.13%. Given Howard Hughes’ higher possible upside, analysts clearly believe Howard Hughes is more favorable than Compass.

Summary

Howard Hughes beats Compass on 8 of the 14 factors compared between the two stocks.

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.

About Howard Hughes

Howard Hughes Holdings Inc., together with its subsidiaries, operates as a real estate development company in the United States. It operates in four segments: Operating Assets; Master Planned Communities (MPCs); Seaport; and Strategic Developments. The Operating Assets segment consists of developed or acquired retail, office, and multi-family properties along with other retail investments. Its MPCs segment develops, sells, and leases residential and commercial land designated for long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Phoenix, Arizona. The Seaport segment is involved in the landlord operations, managed businesses, and events and sponsorships services of its restaurant, retail, and entertain properties in Pier 17, New York City; Historic Area/Uplands; and Tin Building, as well as in 250 Water Street and in the Jean-Georges restaurants. The Strategic Development segment develops and redevelops residential condominiums and commercial properties. It serves homebuilders. Howard Hughes Holdings Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.