Critical Contrast: HomeFed (HOFD) & Tejon Ranch (TRC)

HomeFed (OTCMKTS:HOFD) and Tejon Ranch (NYSE:TRC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Analyst Ratings

This is a summary of recent recommendations for HomeFed and Tejon Ranch, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HomeFed 0 0 0 0 N/A
Tejon Ranch 0 0 1 0 3.00

Tejon Ranch has a consensus target price of $34.00, suggesting a potential upside of 84.98%. Given Tejon Ranch’s higher possible upside, analysts plainly believe Tejon Ranch is more favorable than HomeFed.

Profitability

This table compares HomeFed and Tejon Ranch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HomeFed -4.08% -1.19% -0.93%
Tejon Ranch 9.40% 1.00% 0.82%

Risk and Volatility

HomeFed has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Tejon Ranch has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Earnings & Valuation

This table compares HomeFed and Tejon Ranch’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HomeFed $78.64 million 8.07 $10.93 million N/A N/A
Tejon Ranch $35.66 million 13.39 -$1.55 million N/A N/A

HomeFed has higher revenue and earnings than Tejon Ranch.

Insider and Institutional Ownership

8.9% of HomeFed shares are held by institutional investors. Comparatively, 73.5% of Tejon Ranch shares are held by institutional investors. 5.6% of HomeFed shares are held by insiders. Comparatively, 19.7% of Tejon Ranch shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Tejon Ranch beats HomeFed on 9 of the 11 factors compared between the two stocks.

About HomeFed

HomeFed Corporation, together with its subsidiaries, invests in and develops residential and commercial real estate properties in California, Virginia, South Carolina, Florida, Maine, and New York. The company operates through three segments: Real Estate, Farming, and Corporate. The company's Real Estate segment develops residential and commercial land development projects and other unimproved land, as well as projects in various stages of development, and retail and office operating properties. This segment engages in design engineering, grading raw land, and constructing public infrastructure, such as streets, utilities, and public facilities, as well as develops individual lots for home sites or other facilities. It also holds interest in Brooklyn Renaissance Plaza, which comprises a 665 room hotel operated by Marriott; and operates an office building complex and parking space garage located in Brooklyn, New York. In addition, this segment holds interest in HomeFed Village III Master, LLC that owns and develops an approximate 450 acre community planned for 992 homes in the Otay Ranch General Plan Area of Chula Vista, California. The Farming segment operates the Rampage property, which include grape vineyard and almond orchard located in southern Madera County, California. The company was incorporated in 1988 and is headquartered in Carlsbad, California.

About Tejon Ranch

Tejon Ranch Co. operates as a diversified real estate development and agribusiness company. It operates through five segments: Commercial/Industrial Real Estate Development, Resort/Residential Real Estate Development, Mineral Resources, Farming, and Ranch Operations. The Commercial/Industrial Real Estate Development segment engages in the entitling, planning, and permitting of land for development; construction of infrastructure; construction of pre-leased buildings, and buildings to be leased or sold; and sale of land to third parties for their own development. It is also involved in the activities related to communications leases, and landscape maintenance. This segment leases land to 2 auto service stations with convenience stores, 13 fast-food operations, 2 full-service restaurants, a motel, an antique shop, and a United States Postal Service facility; various microwave repeater locations, radio and cellular transmitter sites, and fiber optic cable routes; and 32 acres of land for an electric power plant. The Resort/Residential Real Estate Development segment engages in the land entitlement, land planning and pre-construction engineering, land stewardship, and conservation activities. The Mineral Resources segment includes oil and gas royalties, rock and aggregate royalties, and royalties from a cement operation leased to National Cement Company of California, Inc.; and the management of water assets and water infrastructure. The Farming segment farms permanent crops, including wine grapes in 1,186 acres, almonds in 1,983 acres, and pistachios in 1,053 acres. It also manages the farming of alfalfa and forage mix on 775 acres in the Antelope Valley; and leases 1,000 acres of land for growing vegetables, as well as permanent crops. The Ranch Operations segment offers game management and ancillary land services comprising grazing leases and filming, as well as various guided hunts. The company was founded in 1843 and is headquartered in Lebec, California.

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