Analyzing Comstock Holding Companies (CHCI) and Gafisa (GFA)

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

Profitability

This table compares Comstock Holding Companies and Gafisa’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%
Gafisa -195.79% -34.52% -11.97%

Risk and Volatility

Comstock Holding Companies has a beta of -0.38, meaning that its share price is 138% less volatile than the S&P 500. Comparatively, Gafisa has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Comstock Holding Companies and Gafisa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comstock Holding Companies 0 0 0 0 N/A
Gafisa 2 0 0 0 1.00

Earnings and Valuation

This table compares Comstock Holding Companies and Gafisa’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Comstock Holding Companies $41.58 million 0.11 -$8.99 million ($1.57) -0.84
Gafisa $263.80 million 0.67 -$333.60 million ($30.65) -0.41

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

Institutional and Insider Ownership

9.8% of Comstock Holding Companies shares are owned by institutional investors. Comparatively, 3.9% of Gafisa shares are owned by institutional investors. 46.4% of Comstock Holding Companies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Comstock Holding Companies beats Gafisa on 6 of the 10 factors compared between the two stocks.

About Comstock Holding Companies

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.

About Gafisa

Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.

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