Critical Analysis: LEG Immobilien (OTCMKTS:LEGIF) and CBRE Group (NYSE:CBRE)

CBRE Group (NYSE:CBRE) and LEG Immobilien (OTCMKTS:LEGIF) are both real estate companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Profitability

This table compares CBRE Group and LEG Immobilien’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CBRE Group	2.98%	25.12%	7.46%
LEG Immobilien	106.86%	14.47%	6.07%

Analyst Recommendations

This is a summary of recent ratings for CBRE Group and LEG Immobilien, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CBRE Group	0	1	6	0	2.86
LEG Immobilien	0	0	1	0	3.00

CBRE Group currently has a consensus price target of $180.40, indicating a potential upside of 37.61%. Given CBRE Group’s higher possible upside, analysts clearly believe CBRE Group is more favorable than LEG Immobilien.

Insider and Institutional Ownership

98.4% of CBRE Group shares are owned by institutional investors. 0.5% of CBRE Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

CBRE Group has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, LEG Immobilien has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Earnings & Valuation

This table compares CBRE Group and LEG Immobilien”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CBRE Group	$40.55 billion	0.94	$1.16 billion	$4.36	30.07
LEG Immobilien	$1.56 billion	2.92	$1.65 billion	$17.65	3.41

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

Summary

CBRE Group beats LEG Immobilien on 9 of the 14 factors compared between the two stocks.

About CBRE Group

CBRE Group, Inc. operates as a commercial real estate services and investment company in the United States, the United Kingdom, and internationally. The Advisory Services segment offers strategic advice and execution to owners, investors, and occupiers of real estate in connection with leasing of offices, and industrial and retail space; clients fully integrated property sales services under the CBRE Capital Markets brand; clients commercial mortgage and structured financing services; originates and sells commercial mortgage loans; property management services, such as marketing, building engineering, accounting, and financial services on a contractual basis for owners of and investors in office, industrial, and retail properties; and valuation services that include market value appraisals, litigation support, discounted cash flow analyses, and feasibility studies, as well as consulting services, such as property condition reports, hotel advisory, and environmental consulting. The Global Workplace Solutions segment provides facilities management, including day-to-day management of client-occupied space, headquarters, regional offices, administrative offices, data centers and other critical facilities, manufacturing and laboratory facilities, and distribution facilities and retail space; and project management services comprising building consulting, program, and project and cost management services under the Turner & Townsend brand name. The Real Estate Investments segment offers investment management services under the CBRE Investment Management brand to pension funds, insurance companies, sovereign wealth funds, foundations, endowments, and other institutional investors; and development services, such as real estate development and investment activities under the Trammell Crow Company and Telford Homes brands to users and investors in commercial real estate, and for their own account. CBRE Group, Inc. was founded in 1906 and is headquartered in Dallas, Texas.

About LEG Immobilien

LEG Immobilien SE, together with its subsidiaries, operates as an integrated property company in Germany. The company engages in the performance of services and management of equity investments; property management and location development; performance of services for third parties and housing industry services; and generation of electricity and heat activities. It also provides information technology (IT) services for third parties; and management services for third-party properties. The company's property portfolio consisted of residential units; commercial units; and garages and parking spaces in North Rhine-Westphalia. LEG Immobilien SE was founded in 1970 and is headquartered in Düsseldorf, Germany.