Critical Survey: AMREP (NYSE:AXR) versus Marcus & Millichap (NYSE:MMI)

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

Earnings and Valuation

This table compares Marcus & Millichap and AMREP”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marcus & Millichap	$696.06 million	1.48	-$12.36 million	($0.16)	-165.98
AMREP	$49.69 million	2.23	$12.72 million	$1.95	10.71

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

Risk & Volatility

Marcus & Millichap has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, AMREP has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Marcus & Millichap and AMREP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marcus & Millichap	2	2	0	0	1.50
AMREP	0	1	0	0	2.00

Marcus & Millichap presently has a consensus target price of $29.00, indicating a potential upside of 9.20%. Given Marcus & Millichap’s higher probable upside, research analysts plainly believe Marcus & Millichap is more favorable than AMREP.

Insider & Institutional Ownership

62.8% of Marcus & Millichap shares are held by institutional investors. Comparatively, 59.9% of AMREP shares are held by institutional investors. 39.9% of Marcus & Millichap shares are held by company insiders. Comparatively, 37.2% of AMREP shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Marcus & Millichap and AMREP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marcus & Millichap	-0.89%	-0.58%	-0.43%
AMREP	22.86%	7.98%	7.73%

Summary

AMREP beats Marcus & Millichap on 9 of the 13 factors compared between the two stocks.

About Marcus & Millichap

Marcus & Millichap, Inc. engages in the provision of investment real estate brokerage services. It specializes in commercial real estate investment sales, property financing, research, and advisory services. The company was founded by George M. Marcus and William A. Millichap in 1971 and is headquartered in Calabasas, CA.

About AMREP

AMREP Corporation, through its subsidiaries, primarily engages in the real estate business. The company operates through two segments, Land Development and Homebuilding. It sells developed and undeveloped lots to homebuilders, commercial and industrial property developers, and others. In addition, the company owns mineral interests covering an area of approximately 55,000 surface acres of land in Sandoval County, New Mexico; and owns oil, gas, and minerals and mineral interests covering an area of approximately 147 surface acres of land in Brighton, Colorado. Further, the company focuses on selling single-family detached homes and attached homes. As of April 30, 2023, it owned approximately 17,000 acres in Sandoval County, New Mexico. The company owns an approximately 160-acre property in Brighton, Colorado. AMREP Corporation was founded in 1961 and is headquartered in Havertown, Pennsylvania.