Financial Review: CBRE Group (CBRE) vs. Forestar Group (FOR)

CBRE Group (NYSE: CBRE) and Forestar Group (NYSE:FOR) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for CBRE Group and Forestar Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBRE Group 0 3 7 1 2.82
Forestar Group 0 0 0 0 N/A

CBRE Group currently has a consensus price target of $48.61, suggesting a potential upside of 1.82%. Given CBRE Group’s higher probable upside, equities analysts clearly believe CBRE Group is more favorable than Forestar Group.

Profitability

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

Net Margins Return on Equity Return on Assets
CBRE Group 4.48% 24.15% 8.43%
Forestar Group 25.80% -2.30% -1.80%

Earnings and Valuation

This table compares CBRE Group and Forestar Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CBRE Group $14.21 billion 1.14 $691.47 million $2.71 17.62
Forestar Group $114.32 million 7.61 $50.25 million N/A N/A

CBRE Group has higher revenue and earnings than Forestar Group.

Volatility and Risk

CBRE Group has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Forestar Group has a beta of 1.8, indicating that its share price is 80% more volatile than the S&P 500.

Institutional & Insider Ownership

93.0% of CBRE Group shares are owned by institutional investors. Comparatively, 23.2% of Forestar Group shares are owned by institutional investors. 0.9% of CBRE Group shares are owned by insiders. Comparatively, 0.1% of Forestar Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

CBRE Group beats Forestar Group on 9 of the 13 factors compared between the two stocks.

About CBRE Group

CBRE Group, Inc. operates as a commercial real estate services and investment company worldwide. It operates through Americas; Europe, Middle East and Africa; Asia Pacific; Global Investment Management; and Development Services segments. The company offers strategic advice and execution to owners, investors, and occupiers of real estate in connection with leasing; integrated property sales, and mortgage and structured financing services under the CBRE Capital Markets brand; and valuation services that include market value appraisals, litigation support, discounted cash flow analyses, and feasibility studies, as well as consulting services, such as property condition reports, hotel advisory, and environmental consulting. It also provides facilities management, project management, transaction management, and strategic consulting services to occupiers of real estate; and property management services comprising construction management, marketing, building engineering, accounting, and financial services for owners/investors in office, industrial, and retail properties. In addition, the company provides investment management services under the CBRE Global Investors brand to pension funds, insurance companies, sovereign wealth funds, foundations, endowments, and other institutional investors; and development services under the Trammell Crow Company brand name primarily to users of and investors in commercial real estate. CBRE Group, Inc. was founded in 1906 and is headquartered in Los Angeles, California.

About Forestar Group

Forestar Group Inc. operates as a real estate development company. The company engages in the acquisition, entitlement, development, and sale of real estate, primarily single-family residential and mixed-use communities. It also sells residential lots to home builders; and commercial properties. As of December 31, 2017, Forestar Group Inc. had 49 entitled, developed, or under development projects in 11 states and 16 markets planned for residential and commercial uses in the United States. The company is headquartered in Austin, Texas. Forestar Group Inc. is a subsidiary of D.R. Horton, Inc.

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