Reviewing Fannie Mae (OTCMKTS:FNMA) & Zillow Group (NASDAQ:ZG)

Zillow Group (NASDAQ:ZG) and Fannie Mae (OTCMKTS:FNMA) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Zillow Group and Fannie Mae’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zillow Group	-2.60%	-1.26%	-1.04%
Fannie Mae	9.68%	-34.69%	0.35%

Institutional & Insider Ownership

20.3% of Zillow Group shares are held by institutional investors. Comparatively, 0.0% of Fannie Mae shares are held by institutional investors. 17.1% of Zillow Group shares are held by company insiders. Comparatively, 1.0% of Fannie Mae shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Zillow Group has a beta of 2.07, meaning that its share price is 107% more volatile than the S&P 500. Comparatively, Fannie Mae has a beta of 2.03, meaning that its share price is 103% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Zillow Group and Fannie Mae, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zillow Group	1	11	13	0	2.48
Fannie Mae	1	0	0	0	1.00

Zillow Group currently has a consensus price target of $85.6190, suggesting a potential upside of 5.23%. Fannie Mae has a consensus price target of $4.00, suggesting a potential downside of 64.29%. Given Zillow Group’s stronger consensus rating and higher probable upside, analysts clearly believe Zillow Group is more favorable than Fannie Mae.

Valuation and Earnings

This table compares Zillow Group and Fannie Mae”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zillow Group	$2.24 billion	8.82	-$112.00 million	($0.26)	-312.92
Fannie Mae	$152.67 billion	0.08	$16.98 billion	N/A	N/A

Fannie Mae has higher revenue and earnings than Zillow Group.

Summary

Zillow Group beats Fannie Mae on 8 of the 12 factors compared between the two stocks.

About Zillow Group

Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.

About Fannie Mae

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.