Nationstar Mortgage Holdings (NYSE: NSM) and Marcus & Millichap (NYSE:MMI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Volatility and Risk

Nationstar Mortgage Holdings has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Marcus & Millichap has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Insider and Institutional Ownership

99.0% of Nationstar Mortgage Holdings shares are owned by institutional investors. Comparatively, 41.9% of Marcus & Millichap shares are owned by institutional investors. 0.8% of Nationstar Mortgage Holdings shares are owned by insiders. Comparatively, 58.3% of Marcus & Millichap shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Nationstar Mortgage Holdings and Marcus & Millichap, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nationstar Mortgage Holdings 2 3 5 0 2.30
Marcus & Millichap 0 3 0 0 2.00

Nationstar Mortgage Holdings currently has a consensus price target of $18.33, suggesting a potential downside of 1.49%. Marcus & Millichap has a consensus price target of $27.00, suggesting a potential downside of 2.74%. Given Nationstar Mortgage Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Nationstar Mortgage Holdings is more favorable than Marcus & Millichap.

Profitability

This table compares Nationstar Mortgage Holdings and Marcus & Millichap’s 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%
Marcus & Millichap 8.51% 22.56% 15.79%

Valuation and Earnings

This table compares Nationstar Mortgage Holdings and Marcus & Millichap’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nationstar Mortgage Holdings $1.42 billion 1.28 $223.77 million $2.29 8.13
Marcus & Millichap $703.37 million 1.50 $101.83 million $1.54 18.03

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

Summary

Nationstar Mortgage Holdings beats Marcus & Millichap on 8 of the 14 factors compared between the two stocks.

Nationstar Mortgage Holdings Company Profile

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.

Marcus & Millichap Company Profile

Marcus & Millichap, Inc. is a brokerage company specializing in commercial real estate investment sales, financing, research and advisory services. The Company offers three primary services to its clients: commercial real estate investment brokerage, financing, and ancillary services, including other research, advisory and consulting services. It provides its financing services through Marcus & Millichap Capital Corporation, which is a broker of debt financing for commercial properties. Its research, advisory and consulting services are designed to assist clients in forming their investment strategy and making transaction decisions. Its advisory services include opinions of value, operating and financial performance benchmarking analysis, and specific asset buy-sell strategies. As of December 31, 2016, the Company had over 1,700 investment sales and financing professionals in 82 offices in the United States and Canada that provide investment brokerage and financing services.

Receive News & Ratings for Nationstar Mortgage Holdings Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Nationstar Mortgage Holdings Inc. and related companies with MarketBeat.com's FREE daily email newsletter.