Reviewing Next (OTCMKTS:NXCLF) and Forestar Group (NYSE:FOR)

Forestar Group (NYSE:FOR) and Next (OTCMKTS:NXCLF) are both small-cap real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Risk and Volatility

Forestar Group has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, Next has a beta of -0.14, meaning that its stock price is 114% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Forestar Group	9.88%	9.42%	5.36%
Next	11.36%	12.27%	8.03%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Forestar Group and Next, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Forestar Group	0	4	2	0	2.33
Next	0	0	0	0	0.00

Forestar Group presently has a consensus target price of $32.67, suggesting a potential upside of 12.88%. Given Forestar Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Forestar Group is more favorable than Next.

Insider & Institutional Ownership

35.5% of Forestar Group shares are held by institutional investors. 0.5% of Forestar Group shares are held by company 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.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Forestar Group	$1.66 billion	0.89	$167.90 million	$3.33	8.69
Next	$188.62 million	1.07	$35.62 million	$0.12	13.17

Forestar Group has higher revenue and earnings than Next. Forestar Group is trading at a lower price-to-earnings ratio than Next, indicating that it is currently the more affordable of the two stocks.

Summary

Forestar Group beats Next on 9 of the 14 factors compared between the two stocks.

About Forestar Group

Forestar Group Inc. operates as a residential lot development company in the United States. The company acquires land and develops infrastructure for single-family residential communities. It sells its residential single-family finished lots to local, regional, and national homebuilders. The company was incorporated in 2005 and is headquartered in Arlington, Texas. Forestar Group Inc. operates as a subsidiary of D.R. Horton, Inc.

About Next

LIFULL Co.,Ltd. provides real estate information services in Japan and internationally. It offers LIFULL HOME'S, a site of real estate and housing information; LIFULL Revitalize Rural Japan that suggests new lifestyles to people in Japan based on the refurbishment of abandoned houses; LIFULL Move, which provides rankings and reviews of moving companies; LIFULL Nursing Care, a special care facility searching web service; and LIFULL Investment, a money lending website. The company also provides LIFULL FaM that enables working mothers balance childcare with work while pursuing a career; LIFULL Storage, a storage space searching web service; LIFULL HUB, a shared office; LIFULL Fab for design and craftsmanship; and LIFULL Table, a gallery and open space for photography, exhibitions, press releases, and workshops. In addition, it offers LivingAnywhere Commons, a community to live; instant house products; Trovit, an aggregation website providing information on items, including real estate and housing, used cars, recruitment, and mail orders; and Mitula, a site that provides information in real estate and housing, used cars, recruitment, and fashion. The company was formerly known as NEXT Co., Ltd. and changed its name to LIFULL Co.,Ltd. in April 2017. LIFULL Co.,Ltd. was founded in 1995 and is headquartered in Tokyo, Japan.