Head-To-Head Survey: Freddie Mac (OTCMKTS:FMCC) & Rocket Companies (NYSE:RKT)

Freddie Mac (OTCMKTS:FMCC) and Rocket Companies (NYSE:RKT) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Profitability

This table compares Freddie Mac and Rocket Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freddie Mac	9.04%	-44.33%	0.34%
Rocket Companies	-0.01%	3.18%	1.01%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Freddie Mac and Rocket Companies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freddie Mac	1	0	0	0	1.00
Rocket Companies	1	9	2	1	2.23

Freddie Mac currently has a consensus price target of $4.50, indicating a potential downside of 64.45%. Rocket Companies has a consensus price target of $16.50, indicating a potential downside of 21.03%. Given Rocket Companies’ stronger consensus rating and higher probable upside, analysts clearly believe Rocket Companies is more favorable than Freddie Mac.

Institutional and Insider Ownership

4.6% of Rocket Companies shares are held by institutional investors. 0.1% of Freddie Mac shares are held by insiders. Comparatively, 92.6% of Rocket Companies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Freddie Mac has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500. Comparatively, Rocket Companies has a beta of 2.3, suggesting that its share price is 130% more volatile than the S&P 500.

Earnings & Valuation

This table compares Freddie Mac and Rocket Companies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freddie Mac	$122.05 billion	0.07	$11.86 billion	($0.03)	-422.00
Rocket Companies	$5.10 billion	8.62	$29.37 million	($0.05)	-417.86

Freddie Mac has higher revenue and earnings than Rocket Companies. Freddie Mac is trading at a lower price-to-earnings ratio than Rocket Companies, indicating that it is currently the more affordable of the two stocks.

Summary

Rocket Companies beats Freddie Mac on 11 of the 15 factors compared between the two stocks.

About Freddie Mac

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It serves banks and other financial institutions, insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Federal Home Loan Mortgage Corporation incorporated in 1970 and is headquartered in McLean, Virginia.

About Rocket Companies

Rocket Companies, Inc., a fintech holding company, provides mortgage lending, title and settlement services, and other financial technology services in the United States and Canada. It operates through two segments, Direct to Consumer and Partner Network. The company’s solutions include Rocket Mortgage, a mortgage lender; Amrock that provides title insurance, property valuation, and settlement services; Rocket Homes, a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience; and Rocket Loans, an online-based personal loans business. It also offers Core Digital Media, a online marketing platform in the mortgage and personal financial product sectors; Rocket Money, a personal finance app that helps clients manage every aspect of their financial lives; Lendesk, a software services company that provides a point of sale system for mortgage professionals and a loan origination system for private lenders; Rock Connections, a sales and support platform specializing in contact center services; and Rocket Innovation Studio that recruits and mentors top technology talent. In addition, the company originates, closes, sells, and services agency-conforming loans. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan. The company operates as a subsidiary of Rock Holdings Inc.