Head to Head Review: FirstService (NASDAQ:FSV) vs. Sumitomo Realty & Development (OTCMKTS:SURDF)

Sumitomo Realty & Development (OTCMKTS:SURDF) and FirstService (NASDAQ:FSV) are both real estate companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Earnings and Valuation

This table compares Sumitomo Realty & Development and FirstService”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo Realty & Development	N/A	N/A	N/A	$138.69	0.16
FirstService	$5.50 billion	1.12	$145.05 million	$3.53	39.89

FirstService has higher revenue and earnings than Sumitomo Realty & Development. Sumitomo Realty & Development is trading at a lower price-to-earnings ratio than FirstService, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Sumitomo Realty & Development and FirstService, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo Realty & Development	1	0	0	0	1.00
FirstService	0	4	8	0	2.67

FirstService has a consensus target price of $184.20, suggesting a potential upside of 30.82%. Given FirstService’s stronger consensus rating and higher probable upside, analysts clearly believe FirstService is more favorable than Sumitomo Realty & Development.

Insider and Institutional Ownership

19.6% of Sumitomo Realty & Development shares are owned by institutional investors. Comparatively, 69.3% of FirstService shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Sumitomo Realty & Development pays an annual dividend of $15.94 per share and has a dividend yield of 70.8%. FirstService pays an annual dividend of $1.22 per share and has a dividend yield of 0.9%. Sumitomo Realty & Development pays out 11.5% of its earnings in the form of a dividend. FirstService pays out 34.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. FirstService has increased its dividend for 7 consecutive years. Sumitomo Realty & Development is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Sumitomo Realty & Development and FirstService’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo Realty & Development	N/A	N/A	N/A
FirstService	2.88%	18.07%	5.59%

Summary

FirstService beats Sumitomo Realty & Development on 10 of the 13 factors compared between the two stocks.

About Sumitomo Realty & Development

Sumitomo Realty & Development Co., Ltd. engages in the real estate business in Japan. It develops and leases office buildings, rental apartments, etc.; develops and sells condominium units, detached houses, etc.; and develops, leases, and sells properties, as well as operates and manages hotels, event halls, retail facilities, land lots, etc. The company also offers real estate brokerage services, as well as engages in the fitness and restaurant businesses. In addition, it provides monthly parking lot, house cleaning, interior designing, catering, convenience stores, and insurance agency services. It serves corporate and private customers. The company was formerly known as Izumi Real Estate Co., Ltd. and changed its name to Sumitomo Realty & Development Co., Ltd. in 1957. Sumitomo Realty & Development Co., Ltd. was incorporated in 1949 and is headquartered in Tokyo, Japan.

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.