Leju Holdings Limited (NYSE: LEJU) and RE/MAX Holdings (NYSE:RMAX) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Dividends

RE/MAX Holdings pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Leju Holdings Limited does not pay a dividend. RE/MAX Holdings pays out 55.0% of its earnings in the form of a dividend. RE/MAX Holdings has raised its dividend for 2 consecutive years.

Risk & Volatility

Leju Holdings Limited has a beta of 2.96, indicating that its share price is 196% more volatile than the S&P 500. Comparatively, RE/MAX Holdings has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares Leju Holdings Limited and RE/MAX Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Leju Holdings Limited -27.57% -31.88% -22.18%
RE/MAX Holdings 12.45% 79.94% 11.81%

Valuation and Earnings

This table compares Leju Holdings Limited and RE/MAX Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Leju Holdings Limited $449.20 million 0.72 -$91.60 million ($0.91) -1.92
RE/MAX Holdings $187.03 million 5.86 $95.88 million $1.31 47.29

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

Analyst Ratings

This is a summary of current ratings and target prices for Leju Holdings Limited and RE/MAX Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Leju Holdings Limited 1 0 0 0 1.00
RE/MAX Holdings 2 3 1 0 1.83

Leju Holdings Limited presently has a consensus price target of $2.10, indicating a potential upside of 20.00%. RE/MAX Holdings has a consensus price target of $62.50, indicating a potential upside of 0.89%. Given Leju Holdings Limited’s higher probable upside, equities research analysts plainly believe Leju Holdings Limited is more favorable than RE/MAX Holdings.

Insider and Institutional Ownership

4.6% of Leju Holdings Limited shares are owned by institutional investors. 0.6% of RE/MAX Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

RE/MAX Holdings beats Leju Holdings Limited on 11 of the 16 factors compared between the two stocks.

Leju Holdings Limited Company Profile

Leju Holdings Limited is an online to offline (O2O), real estate services provider in China. The Company offers real estate e-commerce, online advertising and online listing services through its online platform, which consists of local Websites covering over 260 cities and various mobile applications. The Company integrates its online platform with offline services to facilitate residential property transactions. In addition to its own Websites, the Company operates various real estate and home furnishing Websites of SINA Corporation (SINA). Its O2O services for new residential properties include selling discount coupons and facilitating online property viewing, physical property visits, marketing events and pre-sale customer support. It sells advertising primarily on the SINA new residential properties and home furnishing Websites, which are operated by the Company.

RE/MAX Holdings Company Profile

RE/MAX Holdings, Inc. is a franchisor in the real estate industry, franchising real estate brokerages around the world under the RE/MAX brand and mortgage brokerages within the United States under the Motto Mortgage brand. The Company is a franchised business, with all of the RE/MAX branded brokerage office locations being operated by franchisees, including RE/MAX, LLC, which owns the RE/MAX brand, and sells franchises and franchising rights; Independent Regional Franchise Owner, which owns rights to sell brokerage franchises in a specified region; Franchisee (or Broker-Owner), which operates a RE/MAX-branded brokerage office, lists properties and recruits agents, and Agent (or Sales Associate), including branded independent contractors operating out of local franchise brokerage offices. Under Motto business, the Company operates as a mortgage brokerage franchisor. As a franchisor, the Company helps its Motto franchisees to establish independent mortgage brokerage companies.

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