Critical Review: Marcus & Millichap (MMI) & The Competition

Marcus & Millichap (NYSE:MMI) is one of 31 public companies in the “REAL ESTATE DEV” industry, but how does it contrast to its peers? We will compare Marcus & Millichap to similar businesses based on the strength of its dividends, institutional ownership, analyst recommendations, valuation, earnings, risk and profitability.

Institutional & Insider Ownership

62.8% of Marcus & Millichap shares are owned by institutional investors. Comparatively, 52.7% of shares of all “REAL ESTATE DEV” companies are owned by institutional investors. 39.9% of Marcus & Millichap shares are owned by company insiders. Comparatively, 42.4% of shares of all “REAL ESTATE DEV” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Marcus & Millichap pays an annual dividend of $0.50 per share and has a dividend yield of 1.8%. Marcus & Millichap pays out -312.5% of its earnings in the form of a dividend. As a group, “REAL ESTATE DEV” companies pay a dividend yield of 2.7% and pay out 42.3% of their earnings in the form of a dividend.

Volatility & Risk

Marcus & Millichap has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Marcus & Millichap’s peers have a beta of -6.34, suggesting that their average share price is 734% less volatile than the S&P 500.

Profitability

This table compares Marcus & Millichap and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marcus & Millichap	-0.89%	-0.58%	-0.43%
Marcus & Millichap Competitors	-14.50%	-44.25%	-1.74%

Valuation and Earnings

This table compares Marcus & Millichap and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Marcus & Millichap	$751.28 million	-$12.36 million	-173.49
Marcus & Millichap Competitors	$1.49 billion	-$82.46 million	2.29

Marcus & Millichap’s peers have higher revenue, but lower earnings than Marcus & Millichap. Marcus & Millichap is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of current ratings for Marcus & Millichap and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marcus & Millichap	2	2	0	0	1.50
Marcus & Millichap Competitors	195	674	301	11	2.11

Marcus & Millichap currently has a consensus price target of $29.00, indicating a potential upside of 4.47%. As a group, “REAL ESTATE DEV” companies have a potential upside of 27.18%. Given Marcus & Millichap’s peers stronger consensus rating and higher possible upside, analysts clearly believe Marcus & Millichap has less favorable growth aspects than its peers.

Summary

Marcus & Millichap peers beat Marcus & Millichap on 8 of the 15 factors compared.

Marcus & Millichap Company Profile

Marcus & Millichap, Inc. engages in the provision of investment real estate brokerage services. It specializes in commercial real estate investment sales, property financing, research, and advisory services. The company was founded by George M. Marcus and William A. Millichap in 1971 and is headquartered in Calabasas, CA.