Marcus & Millichap (NYSE:MMI) & Douglas Elliman (NYSE:DOUG) Critical Comparison

Douglas Elliman (NYSE:DOUG) and Marcus & Millichap (NYSE:MMI) are both small-cap real estate companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Volatility and Risk

Douglas Elliman has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, Marcus & Millichap has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Profitability

This table compares Douglas Elliman and Marcus & Millichap’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Douglas Elliman	2.47%	-19.16%	-6.72%
Marcus & Millichap	1.77%	2.97%	2.21%

Insider & Institutional Ownership

59.6% of Douglas Elliman shares are owned by institutional investors. Comparatively, 62.8% of Marcus & Millichap shares are owned by institutional investors. 9.6% of Douglas Elliman shares are owned by company insiders. Comparatively, 39.9% of Marcus & Millichap shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Douglas Elliman and Marcus & Millichap, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Douglas Elliman	1	2	0	0	1.67
Marcus & Millichap	1	1	0	0	1.50

Marcus & Millichap has a consensus price target of $28.00, suggesting a potential upside of 9.70%. Given Marcus & Millichap’s higher possible upside, analysts clearly believe Marcus & Millichap is more favorable than Douglas Elliman.

Valuation and Earnings

This table compares Douglas Elliman and Marcus & Millichap”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Douglas Elliman	$1.03 billion	0.16	$15.22 million	$0.17	10.74
Marcus & Millichap	$755.16 million	1.28	-$1.91 million	$0.39	65.45

Douglas Elliman has higher revenue and earnings than Marcus & Millichap. Douglas Elliman is trading at a lower price-to-earnings ratio than Marcus & Millichap, indicating that it is currently the more affordable of the two stocks.

Summary

Marcus & Millichap beats Douglas Elliman on 8 of the 13 factors compared between the two stocks.

About Douglas Elliman

Douglas Elliman Inc. (NYSE: DOUG) is a real estate services company and the parent of Douglas Elliman Realty, one of the largest residential real estate brokerage firms in the United States. The company provides brokerage services for buyers and sellers of residential properties, including luxury homes, condominiums, cooperatives and rental properties. In addition to residential brokerage, Douglas Elliman offers new-development marketing and sales, commercial real estate services, property management, relocation assistance and related advisory services.

About Marcus & Millichap

Marcus & Millichap is a commercial real estate brokerage specializing in the sale, financing, and advisory of investment properties. Its services include investment sales, debt and equity financing, and research and market analysis for property owners, investors, and other real estate clients. Founded in 1971, the company serves clients across the United States and Canada through a network of offices and investment professionals. Its financing services include arranging loans and other capital for commercial real estate transactions.