Critical Survey: Comstock Holding Companies (CHCI) versus Forestar Group (FOR)

Comstock Holding Companies (NASDAQ: CHCI) and Forestar Group (NYSE:FOR) are both small-cap real estate development & operations – nec companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.

Risk & Volatility

Comstock Holding Companies has a beta of -0.38, indicating that its share price is 138% less volatile than the S&P 500. Comparatively, Forestar Group has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Comstock Holding Companies and Forestar Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comstock Holding Companies 0 0 0 0 N/A
Forestar Group 0 0 0 0 N/A

Profitability

This table compares Comstock Holding Companies and Forestar Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comstock Holding Companies -14.02% -94.21% -7.85%
Forestar Group 75.41% 6.83% 5.28%

Valuation & Earnings

This table compares Comstock Holding Companies and Forestar Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Comstock Holding Companies $41.58 million 0.15 -$8.99 million ($1.57) -1.08
Forestar Group $197.31 million 4.56 $58.64 million $1.79 11.98

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

Insider & Institutional Ownership

9.8% of Comstock Holding Companies shares are owned by institutional investors. Comparatively, 79.7% of Forestar Group shares are owned by institutional investors. 46.4% of Comstock Holding Companies shares are owned by company insiders. Comparatively, 3.1% of Forestar Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Forestar Group beats Comstock Holding Companies on 10 of the 11 factors compared between the two stocks.

Comstock Holding Companies Company Profile

Comstock Holding Companies, Inc. (Comstock ), formerly Comstock Homebuilding Companies, Inc. is a diversified real estate development and services company focused on the Washington, D.C. metropolitan area. The Company builds a range of products including apartments, single-family homes, townhouses, mid-rise condominiums, high-rise multi-family condominiums and mixed-use (residential and commercial) developments. As of December 31, 2011, the Company had built and delivered more than 5,300 homes. The Company has built homes and apartment buildings in suburban communities, where it focuses on low density products. The Company’s apartment buildings are developed as rental properties to be held and operated for its own purposes, converted at some point to for-sale condominium units or sold on a merchant build basis. In March 7, 2012, Cascades II completed the sale of its Potomac Square Apartment project to an affiliate of CAPREIT Acquisition Corporation.

Forestar Group Company Profile

Forestar Group Inc. is a residential and mixed-use real estate development company. The Company operates through three segments. The Real Estate segment secures entitlements and develops infrastructure on its lands, for single-family residential and mixed-use communities. The Mineral resources segment is focused on its owned oil and gas mineral interests through promoting exploration, development and production activities. The Other segment manages its timber holdings, recreational leases and water resource initiatives. As of December 31, 2016, its core community development business had directly or through ventures interests in 50 residential and mixed-use projects consisting of 4,600 acres of real estate located in 10 states and 14 markets. As of December 31, 2016, its non-core assets included approximately 523,000 net acres of owned mineral assets, 19,000 acres of timberland and undeveloped land, four multifamily assets and approximately 20,000 acres of groundwater leases.

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