Financial Analysis: Brookfield (NYSE:BN) and CBRE Group (NYSE:CBRE)

Brookfield (NYSE:BN) and CBRE Group (NYSE:CBRE) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Insider & Institutional Ownership

61.6% of Brookfield shares are held by institutional investors. Comparatively, 98.4% of CBRE Group shares are held by institutional investors. 11.0% of Brookfield shares are held by company insiders. Comparatively, 0.4% of CBRE Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brookfield	1.11%	3.77%	1.21%
CBRE Group	2.86%	18.89%	6.58%

Analyst Ratings

This is a summary of current ratings and price targets for Brookfield and CBRE Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brookfield	0	0	8	1	3.11
CBRE Group	0	2	7	0	2.78

Brookfield currently has a consensus target price of $75.44, suggesting a potential upside of 14.61%. CBRE Group has a consensus target price of $165.22, suggesting a potential upside of 2.00%. Given Brookfield’s stronger consensus rating and higher possible upside, equities analysts plainly believe Brookfield is more favorable than CBRE Group.

Volatility & Risk

Brookfield has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500. Comparatively, CBRE Group has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Earnings and Valuation

This table compares Brookfield and CBRE Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brookfield	$86.01 billion	1.26	$641.00 million	$0.43	153.08
CBRE Group	$35.77 billion	1.35	$968.00 million	$3.57	45.37

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

Summary

Brookfield beats CBRE Group on 8 of the 15 factors compared between the two stocks.

About Brookfield

Brookfield Corporation is an alternative asset manager and REIT/Real Estate Investment Manager firm focuses on real estate, renewable power, infrastructure and venture capital and private equity assets. It manages a range of public and private investment products and services for institutional and retail clients. It typically makes investments in sizeable, premier assets across geographies and asset classes. It invests both its own capital as well as capital from other investors. Within private equity and venture capital, it focuses on acquisition, early ventures, control buyouts and financially distressed, buyouts and corporate carve-outs, recapitalizations, convertible, senior and mezzanine financings, operational and capital structure restructuring, strategic re-direction, turnaround, and under-performing midmarket companies. It invests in both public debt and equity markets. It invests in private equity sectors with focus on Business Services include infrastructure, healthcare, road fuel distribution and marketing, construction and real estate; Industrials include manufacturers of automotive batteries, graphite electrodes, returnable plastic packaging, and sanitation management and development; and Residential/ infrastructure services. It targets companies which likely possess underlying real assets, primarily in sectors such as industrial products, building materials, metals, mining, homebuilding, oil and gas, paper and packaging, manufacturing and forest product sectors. It invests globally with focus on North America including Brazil, the United States, Canada; Europe; and Australia; and Asia-Pacific. The firm considers equity investments in the range of $2 million to $500 million. It has a four-year investment period and a 10-year term with two one-year extensions. The firm prefers to take minority stake and majority stake. Brookfield Corporation was founded in 1997 and based in Toronto, Canada with additional offices across Northern America; South America; Europe; Middle East and Asia.

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.