Gafisa SA (NYSE: GFA) and Gazit-Globe (NYSE:GZT) are both small-cap construction companies, but which is the superior business? We will compare the two businesses based on the strength of their profitabiliy, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Gafisa SA and Gazit-Globe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gafisa SA -84.96% -17.04% -7.10%
Gazit-Globe N/A N/A N/A

Institutional & Insider Ownership

5.0% of Gafisa SA shares are held by institutional investors. Comparatively, 8.7% of Gazit-Globe shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Gafisa SA and Gazit-Globe, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gafisa SA 1 0 0 0 1.00
Gazit-Globe 0 1 3 0 2.75

Gazit-Globe has a consensus price target of $12.75, suggesting a potential upside of 30.90%. Given Gazit-Globe’s stronger consensus rating and higher possible upside, analysts plainly believe Gazit-Globe is more favorable than Gafisa SA.

Dividends

Gazit-Globe pays an annual dividend of $1.40 per share and has a dividend yield of 14.4%. Gafisa SA does not pay a dividend.

Valuation and Earnings

This table compares Gafisa SA and Gazit-Globe’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gafisa SA $266.59 million 0.35 -$63.42 million ($25.65) -0.27
Gazit-Globe $1.41 billion 1.35 $797.37 million N/A N/A

Gazit-Globe has higher revenue and earnings than Gafisa SA.

Risk and Volatility

Gafisa SA has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500. Comparatively, Gazit-Globe has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Summary

Gazit-Globe beats Gafisa SA on 11 of the 12 factors compared between the two stocks.

Gafisa SA Company Profile

Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.

Gazit-Globe Company Profile

Gazit-Globe Ltd. is a real estate company specialized in retail premises. The Company is engaged in the acquisition, development and management of properties. Its segments include Finland, Norway, Sweden, and Estonia and Denmark. It focuses on supermarket-anchored shopping centers in urban growth markets. It operates internationally through its publicly traded and privately held subsidiaries. It operates in more than 20 countries, and owns and manages approximately 430 properties with a gross leasable area of approximately 6.5 million square meters. The Company’s properties include Kista Galleria, Iso Omena, Potrero Center, Yorkville Village, Atrium Promenada, Serramonte Shopping Center, Galeria Dominikanska, Westbury Plaza, Northgate Centre, San Pelegrino Shopping Mall, G Tzameret, Kosice Optima Shopping Center, Coens Galerie, Parkway Mall, Rutherford Marketplace, Atrium Copernicus, Atrium Biala, Molo Shopping Center, Wentorf Shopping Center, Plaza Escuela and Mount Royal Village.

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