Comparing Stratus Properties (NASDAQ:STRS) & Smith Douglas Homes (NYSE:SDHC)

Stratus Properties (NASDAQ:STRS) and Smith Douglas Homes (NYSE:SDHC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Stratus Properties and Smith Douglas Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stratus Properties	1	0	0	0	1.00
Smith Douglas Homes	3	5	1	0	1.78

Smith Douglas Homes has a consensus price target of $16.60, suggesting a potential downside of 21.62%. Given Smith Douglas Homes’ stronger consensus rating and higher possible upside, analysts plainly believe Smith Douglas Homes is more favorable than Stratus Properties.

Profitability

This table compares Stratus Properties and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stratus Properties	-25.38%	-2.57%	-1.46%
Smith Douglas Homes	1.13%	0.12%	0.10%

Insider & Institutional Ownership

61.6% of Stratus Properties shares are held by institutional investors. 10.0% of Stratus Properties shares are held by 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.

Earnings and Valuation

This table compares Stratus Properties and Smith Douglas Homes”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stratus Properties	$54.18 million	3.30	$1.96 million	($1.01)	-22.16
Smith Douglas Homes	$975.46 million	1.12	$16.07 million	$1.25	16.94

Smith Douglas Homes has higher revenue and earnings than Stratus Properties. Stratus Properties is trading at a lower price-to-earnings ratio than Smith Douglas Homes, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Stratus Properties has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Summary

Smith Douglas Homes beats Stratus Properties on 10 of the 14 factors compared between the two stocks.

About Stratus Properties

Stratus Properties Inc., a real estate company, engages in the entitlement, development, management, leasing, and sale of multi and single family residential and commercial real estate properties in the Austin, Texas area and other select markets in Texas. The company operates in two segments, Real Estate Operations and Leasing Operations. Its leasing operations cover lease of space at retail and mixed-use and multi-family properties. The company was incorporated in 1992 and is headquartered in Austin, Texas.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.