Nationstar Mortgage Holdings (NYSE: NSM) and Reis (NASDAQ:REIS) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Earnings & Valuation

This table compares Nationstar Mortgage Holdings and Reis’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nationstar Mortgage Holdings $1.42 billion 1.12 $223.85 million $2.29 7.09
Reis $46.93 million 4.17 $6.64 million $0.10 170.02

Nationstar Mortgage Holdings has higher revenue and earnings than Reis. Nationstar Mortgage Holdings is trading at a lower price-to-earnings ratio than Reis, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

98.5% of Nationstar Mortgage Holdings shares are owned by institutional investors. Comparatively, 59.7% of Reis shares are owned by institutional investors. 0.8% of Nationstar Mortgage Holdings shares are owned by insiders. Comparatively, 21.6% of Reis shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Nationstar Mortgage Holdings and Reis, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nationstar Mortgage Holdings 2 3 5 0 2.30
Reis 0 0 2 0 3.00

Nationstar Mortgage Holdings presently has a consensus target price of $18.33, indicating a potential upside of 12.96%. Reis has a consensus target price of $24.50, indicating a potential upside of 44.12%. Given Reis’ stronger consensus rating and higher probable upside, analysts plainly believe Reis is more favorable than Nationstar Mortgage Holdings.

Profitability

This table compares Nationstar Mortgage Holdings and Reis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nationstar Mortgage Holdings 10.52% 9.64% 0.87%
Reis 2.49% 1.20% 0.92%

Dividends

Reis pays an annual dividend of $0.68 per share and has a dividend yield of 4.0%. Nationstar Mortgage Holdings does not pay a dividend. Reis pays out 680.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Nationstar Mortgage Holdings has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, Reis has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.

Summary

Nationstar Mortgage Holdings beats Reis on 9 of the 16 factors compared between the two stocks.

About Nationstar Mortgage Holdings

Nationstar Mortgage Holdings Inc. provides servicing, origination and transaction based services principally to single-family residences throughout the United States. The Company operates through three segments: Servicing, Originations and Xome. The Company provides residential loan services in the United States. The Company also operates an integrated residential loan origination platform that is primarily focused on customer retention. Its Xome subsidiary offers an array of complementary services related to the purchase and disposition of residential real estate. It provides non-bank services and residential mortgage services in the United States conducting operations through its Nationstar Mortgage and Champion Mortgage brands. It originates and purchases conventional mortgage loans conforming to the underwriting standards of the government sponsored entities, which it collectively refers to as Agency loans. The Xome segment is a provider of technology and data-enhanced solutions.

About Reis

Reis, Inc. (Reis) is engaged in providing commercial real estate market information and analytical tools to real estate professionals, through its Reis Services subsidiary. The Company operates through Reis Services segment. It maintains a database containing detailed information on commercial properties in metropolitan markets and neighborhoods throughout the United States. The database contains information on apartment, office, retail, warehouse or distribution, flex or research and development, self-storage and seniors housing properties, and is used by real estate investors, lenders and other professionals to make informed buying, selling and financing decisions. Its product portfolio includes Reis Subscriber Edition (SE), its delivery platform aimed at larger and mid-sized enterprises; ReisReports, aimed at prosumers and smaller enterprises, and Mobiuss Portfolio CRE (Mobiuss), aimed at risk managers and credit administrators at banks and non-bank lending institutions.

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