Critical Contrast: Star (NASDAQ:STHO) and RE/MAX (NYSE:RMAX)

Star (NASDAQ:STHO) and RE/MAX (NYSE:RMAX) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Institutional & Insider Ownership

89.3% of Star shares are held by institutional investors. Comparatively, 93.2% of RE/MAX shares are held by institutional investors. 3.7% of Star shares are held by insiders. Comparatively, 6.8% of RE/MAX shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Star and RE/MAX, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Star	0	0	0	0	0.00
RE/MAX	0	2	0	0	2.00

RE/MAX has a consensus price target of $9.75, indicating a potential upside of 21.34%. Given RE/MAX’s stronger consensus rating and higher possible upside, analysts clearly believe RE/MAX is more favorable than Star.

Profitability

This table compares Star and RE/MAX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Star	-50.51%	-30.71%	-18.04%
RE/MAX	3.19%	-51.38%	4.88%

Valuation & Earnings

This table compares Star and RE/MAX”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Star	$113.30 million	N/A	-$86.75 million	($3.41)	-2.13
RE/MAX	$307.68 million	0.52	$7.12 million	$0.47	17.10

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

Volatility & Risk

Star has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, RE/MAX has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Summary

RE/MAX beats Star on 10 of the 12 factors compared between the two stocks.

About Star

Star Holdings engages in the non-ground lease related commercial real estate businesses in the United States. Its portfolio primarily comprises interest in the Asbury Park Waterfront and Magnolia Green residential development projects. Star Holdings is based in New York, New York.

About RE/MAX

RE/MAX Holdings, Inc. operates as a franchisor of real estate brokerage services in the United States, Canada, and internationally. It operates through Real Estate, Mortgage, and Marketing Funds segments. The company offers real estate brokerage franchising services under the RE/MAX brand; mortgage brokerage services to real estate brokers, real estate professionals, mortgage professionals, and other investors under the Motto Mortgage brand; and mortgage loan processing software and services under the wemlo brand. It also provides kvCORE platform, which integrates a suite of digital products that enables agents, brokers, and teams to establish and manage client relationships; and RE/MAX University platform, a learning hub designed to help each agent in their professional expertise. The company was founded in 1973 and is headquartered in Denver, Colorado.