Compass (NYSE:COMP) & FirstService (NASDAQ:FSV) Financial Analysis

FirstService (NASDAQ:FSV) and Compass (NYSE:COMP) are both mid-cap real estate companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Institutional & Insider Ownership

69.3% of FirstService shares are held by institutional investors. Comparatively, 67.0% of Compass shares are held by institutional investors. 2.9% of Compass shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares FirstService and Compass’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstService	2.88%	18.07%	5.59%
Compass	0.63%	3.62%	1.37%

Earnings and Valuation

This table compares FirstService and Compass”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstService	$5.50 billion	1.03	$145.05 million	$3.53	36.58
Compass	$6.96 billion	1.10	-$58.50 million	$0.06	167.98

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

Volatility & Risk

FirstService has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Compass has a beta of 2.32, suggesting that its share price is 132% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for FirstService and Compass, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstService	0	4	8	0	2.67
Compass	0	6	8	1	2.67

FirstService currently has a consensus price target of $184.20, suggesting a potential upside of 42.67%. Compass has a consensus price target of $14.15, suggesting a potential upside of 40.43%. Given FirstService’s higher probable upside, research analysts clearly believe FirstService is more favorable than Compass.

Summary

FirstService beats Compass on 7 of the 13 factors compared between the two stocks.

About FirstService

FirstService Corporation, together with its subsidiaries, provides residential property management and other essential property services to residential and commercial customers in the United States and Canada. It operates through two segments: FirstService Residential and FirstService Brands. The FirstService Residential segment offers services for private residential communities, such as condominiums, co-operatives, homeowner associations, master-planned communities, active adult and lifestyle communities, and various other residential developments. This segment provides a range of ancillary services, including on-site staffing for building engineering and maintenance, full-service amenity management, and security and concierge/front desk; and financial services comprising cash management, other banking transaction-related, and specialized property insurance brokerage. In addition, this segment offers energy management solutions and advisory services, and resale processing services. Its FirstService Brands segment operates and provides essential property services to residential and commercial customers through franchise networks; and company-owned operations, including California Closets, Paul Davis Restoration, and CertaPro Painters operations. It provides residential and commercial restoration, painting, and floor coverings design and installation services; custom-designed and installed closet, and home storage solutions; home inspection services; and fire protection and related services. This segment offers its services primarily under the Paul Davis Restoration, Roofing Corp of America, First Onsite property Restoration, Century Fire Protection, CertaPro Painters, California Closets, Pillar to Post Home Inspectors, and Floor Coverings International brand names. FirstService Corporation was incorporated in 1988 and is headquartered in Toronto, Canada.

About Compass

Compass, Inc. provides real estate brokerage services in the United States. It operates a cloud-based platform that provides an integrated suite of software for customer relationship management, marketing, client service, operations, and other functionality in the real estate industry. The company offers mobile apps that allow agents to manage their business anytime and anywhere, as well as designs consumer-grade user interfaces, automated and simplified workflows for agent-client interactions, and insight-rich dashboards and reports. It also provides full-service title and escrow/settlement services to real estate agents' clients, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans; and Compass Concierge, a program in which home sellers access to capital to front the cost of home improvement services. The company was formerly known as Urban Compass, Inc. and changed its name to Compass, Inc. in January 2021.Compass, Inc. was incorporated in 2012 and is headquartered in New York, New York.