Critical Review: FirstService (FSV) vs. SouFun (SFUN)
FirstService (NASDAQ: FSV) and SouFun (NYSE:SFUN) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.
Insider & Institutional Ownership
61.2% of FirstService shares are held by institutional investors. Comparatively, 45.4% of SouFun shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares FirstService and SouFun’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
FirstService pays an annual dividend of $0.49 per share and has a dividend yield of 0.7%. SouFun does not pay a dividend. FirstService pays out 54.4% of its earnings in the form of a dividend.
This is a summary of recent ratings for FirstService and SouFun, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
FirstService presently has a consensus price target of $66.50, suggesting a potential downside of 3.33%. SouFun has a consensus price target of $3.90, suggesting a potential downside of 9.09%. Given FirstService’s higher probable upside, equities research analysts clearly believe FirstService is more favorable than SouFun.
Earnings and Valuation
This table compares FirstService and SouFun’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|FirstService||$1.48 billion||1.67||$33.59 million||$0.90||76.43|
|SouFun||$916.39 million||2.07||-$169.63 million||($0.02)||-214.50|
FirstService has higher revenue and earnings than SouFun. SouFun is trading at a lower price-to-earnings ratio than FirstService, indicating that it is currently the more affordable of the two stocks.
FirstService beats SouFun on 9 of the 13 factors compared between the two stocks.
Firstservice Corporation is a provider of residential property management and other essential property services to residential and commercial customers. The Company operates through two segments: FirstService Residential and FirstService Brands. FirstService Residential is a property manager and provides ancillary services in the areas of on-site staffing, including building engineering and maintenance, full-service amenity management, security, concierge and front desk personnel, and landscaping; banking and insurance products, and energy conservation and management solutions. FirstService Brands provides essential property services to residential and commercial customers in North America through franchise networks and Company-owned locations. The principal brands in this division include Paul Davis Restoration, California Closets, Certa Pro Painters, Pillar to Post Home Inspectors, Floor Coverings International, College Pro Painters, Century Fire Protection and Service America.
Fang Holdings Limited, formerly SouFun Holdings Limited, operates as a real estate Internet portal in China. The Company’s Websites and mobile applications support active online communities and networks of users seeking information on, and services for, the real estate and home-related sectors in China. The Company, through its Internet platform, is engaged in the development of transaction and financing platforms by offering direct sales services for new homes, online real estate brokerage services and financial services. The Company’s service offerings include marketing services, E-commerce services, listing services, Financial services and other value-added services. The Company provides secured loans in the form of entrusted loans and mortgage loans and unsecured loans primarily to home buyers, real estate developers and other borrowers that meet its credit assessment requirements.
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