Financial Review: Legacy Housing (NASDAQ:LEGH) vs. RE/MAX (NYSE:RMAX)

RE/MAX (NYSE:RMAX) and Legacy Housing (NASDAQ:LEGH) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Analyst Ratings

This is a breakdown of recent ratings and target prices for RE/MAX and Legacy Housing, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RE/MAX	1	0	1	0	2.00
Legacy Housing	0	3	0	1	2.50

RE/MAX currently has a consensus target price of $13.80, suggesting a potential upside of 24.04%. Legacy Housing has a consensus target price of $21.00, suggesting a potential downside of 18.36%. Given RE/MAX’s higher probable upside, research analysts clearly believe RE/MAX is more favorable than Legacy Housing.

Earnings and Valuation

This table compares RE/MAX and Legacy Housing”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RE/MAX	$287.36 million	0.82	$8.15 million	$0.01	1,112.50
Legacy Housing	$164.57 million	3.72	$41.81 million	$1.78	14.45

Legacy Housing has lower revenue, but higher earnings than RE/MAX. Legacy Housing is trading at a lower price-to-earnings ratio than RE/MAX, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.2% of RE/MAX shares are held by institutional investors. Comparatively, 89.3% of Legacy Housing shares are held by institutional investors. 6.8% of RE/MAX shares are held by company insiders. Comparatively, 30.1% of Legacy Housing shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares RE/MAX and Legacy Housing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RE/MAX	0.13%	-90.29%	5.82%
Legacy Housing	26.01%	8.08%	7.44%

Volatility & Risk

RE/MAX has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500. Comparatively, Legacy Housing has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Summary

Legacy Housing beats RE/MAX on 9 of the 15 factors compared between the two stocks.

About RE/MAX

RE/MAX Holdings, Inc. operates as a franchisor of real estate brokerage services in the United States, Canada, and internationally. It operates through Real Estate, Mortgage, and Marketing Funds segments. The company offers real estate brokerage franchising services under the RE/MAX brand; mortgage brokerage services to real estate brokers, real estate professionals, mortgage professionals, and other investors under the Motto Mortgage brand; and mortgage loan processing software and services under the wemlo brand. It also provides kvCORE platform, which integrates a suite of digital products that enables agents, brokers, and teams to establish and manage client relationships; and RE/MAX University platform, a learning hub designed to help each agent in their professional expertise. The company was founded in 1973 and is headquartered in Denver, Colorado.

About Legacy Housing

Legacy Housing Corporation engages in the building, sale, and financing of manufactured homes and tiny houses primarily in the southern United States. It manufactures and provides for the transport of mobile homes, including 1 to 5 bedrooms with 1 to 3 1/2 bathrooms; and provides wholesale financing to dealers and mobile home parks, as well as retail financing to consumers. The company also offers inventory financing for its independent retailers; consumer financing for its products; and financing to manufactured housing community owners that buy or lease its products for use in their rental housing communities. In addition, it involved in financing and developing new manufactured home communities. The company markets its homes under the Legacy brand through a network of independent retailers and company-owned stores; and directly to manufactured home communities. Legacy Housing Corporation was founded in 2005 and is headquartered in Bedford, Texas.