Head-To-Head Analysis: RMR Group (RMR) versus Transcontinental Realty Investors (TCI)

RMR Group (NYSE: RMR) and Transcontinental Realty Investors (NYSE:TCI) are both small-cap financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for RMR Group and Transcontinental Realty Investors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RMR Group 0 2 2 0 2.50
Transcontinental Realty Investors 0 3 0 0 2.00

RMR Group currently has a consensus price target of $60.00, suggesting a potential upside of 25.39%. Transcontinental Realty Investors has a consensus price target of $20.33, suggesting a potential downside of 11.86%. Given RMR Group’s stronger consensus rating and higher probable upside, research analysts clearly believe RMR Group is more favorable than Transcontinental Realty Investors.

Profitability

This table compares RMR Group and Transcontinental Realty Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RMR Group 32.69% 19.25% 18.06%
Transcontinental Realty Investors -15.90% -10.57% -1.67%

Institutional & Insider Ownership

0.3% of Transcontinental Realty Investors shares are held by institutional investors. 81.0% of Transcontinental Realty Investors shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares RMR Group and Transcontinental Realty Investors’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RMR Group $230.67 million 3.34 $154.40 million N/A N/A
Transcontinental Realty Investors $121.07 million 1.66 $43.45 million ($0.28) -82.39

RMR Group has higher revenue and earnings than Transcontinental Realty Investors.

Summary

RMR Group beats Transcontinental Realty Investors on 9 of the 11 factors compared between the two stocks.

RMR Group Company Profile

The RMR Group Inc. is a holding company. The Company’s business is primarily conducted by its subsidiary, The RMR Group LLC (RMR LLC). The Company’s segments include RMR LLC and All Other Operations. RMR LLC manages a portfolio of publicly owned real estate and real estate related businesses. RMR LLC manages Government Properties Income Trust, a real estate investment trust (REIT) that primarily owns properties that are leased to government tenants; Hospitality Properties Trust, an REIT that primarily owns hotels and travel centers; Select Income REIT, an REIT that primarily owns properties leased to single tenants across the United States and leased lands in Hawaii, and Senior Housing Properties Trust, an REIT that primarily owns senior living communities and medical office buildings. As of June 30, 2016, RMR LLC managed over 1,300 properties, which were located in 48 states, Washington, District of Columbia, Puerto Rico and Canada.

Transcontinental Realty Investors Company Profile

Transcontinental Realty Investors, Inc. is an externally advised and managed real estate investment company that owns a portfolio of income-producing properties and land held for development. The Company’s segments are Commercial Properties, Apartments, Land and Other. Its portfolio of income-producing properties includes residential apartment communities, office buildings and other commercial properties. It acquires land mainly in in-fill locations or suburban markets. The Company’s income-producing properties consist of approximately eight commercial properties, including five office buildings, two retail properties and an industrial warehouse, comprising in aggregate approximately 1.9 million square feet; a golf course comprising approximately 96.09 acres, and approximately 50 residential apartment communities comprising over 7,980 units, excluding apartments being developed. In addition, it owns approximately 3,660 acres of land held for development.

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