Head-To-Head Contrast: The RMR Group (NASDAQ:RMR) and CBRE Group (NYSE:CBRE)

CBRE Group (NYSE:CBRE) and The RMR Group (NASDAQ:RMR) are both real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Volatility & Risk

CBRE Group has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, The RMR Group has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CBRE Group	$40.55 billion	1.00	$1.16 billion	$4.36	32.02
The RMR Group	$700.28 million	0.86	$17.60 million	$1.14	16.43

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for CBRE Group and The RMR Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CBRE Group	0	1	7	0	2.88
The RMR Group	0	2	2	0	2.50

CBRE Group presently has a consensus target price of $180.33, indicating a potential upside of 29.17%. The RMR Group has a consensus target price of $19.00, indicating a potential upside of 1.44%. Given CBRE Group’s stronger consensus rating and higher possible upside, analysts clearly believe CBRE Group is more favorable than The RMR Group.

Insider and Institutional Ownership

98.4% of CBRE Group shares are held by institutional investors. Comparatively, 42.3% of The RMR Group shares are held by institutional investors. 0.5% of CBRE Group shares are held by company insiders. Comparatively, 54.7% of The RMR Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CBRE Group	2.98%	25.12%	7.46%
The RMR Group	3.10%	2.96%	1.71%

Summary

CBRE Group beats The RMR Group on 12 of the 14 factors compared between the two stocks.

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.

About The RMR Group

The RMR Group Inc., through its subsidiary, The RMR Group LLC, provides asset management services in the United States. The company offers management services to its four publicly traded real estate investment trusts, three real estate operating companies, and private capital vehicles. It also provides advisory services to publicly traded mortgage real estate investment trust. The company was formerly known as REIT Management & Research Inc. and changed its name to The RMR Group Inc. in October 2015. The RMR Group Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.