Contrasting Acacia Research (NASDAQ:ACTG) and Rocket Companies (NYSE:RKT)

Rocket Companies (NYSE:RKT) and Acacia Research (NASDAQ:ACTG) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Valuation & Earnings

This table compares Rocket Companies and Acacia Research”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocket Companies	$6.70 billion	5.68	-$68.00 million	$0.14	95.84
Acacia Research	$285.23 million	1.53	$21.68 million	($0.15)	-29.87

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

Institutional and Insider Ownership

4.6% of Rocket Companies shares are owned by institutional investors. Comparatively, 86.7% of Acacia Research shares are owned by institutional investors. 57.7% of Rocket Companies shares are owned by insiders. Comparatively, 1.7% of Acacia Research shares are owned by insiders. 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.

Profitability

This table compares Rocket Companies and Acacia Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rocket Companies	4.70%	5.13%	1.88%
Acacia Research	-5.39%	0.44%	0.33%

Volatility & Risk

Rocket Companies has a beta of 2.2, suggesting that its share price is 120% more volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Rocket Companies and Acacia Research, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocket Companies	0	9	9	0	2.50
Acacia Research	1	0	1	0	2.00

Rocket Companies currently has a consensus price target of $19.57, indicating a potential upside of 45.86%. Acacia Research has a consensus price target of $6.00, indicating a potential upside of 33.93%. Given Rocket Companies’ stronger consensus rating and higher possible upside, equities analysts plainly believe Rocket Companies is more favorable than Acacia Research.

Summary

Rocket Companies beats Acacia Research on 12 of the 14 factors compared between the two stocks.

About Rocket Companies

Rocket Companies, Inc., a fintech holding company, provides mortgage lending, title and settlement services, and other financial technology services in the United States and Canada. It operates through two segments, Direct to Consumer and Partner Network. The company’s solutions include Rocket Mortgage, a mortgage lender; Amrock that provides title insurance, property valuation, and settlement services; Rocket Homes, a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience; and Rocket Loans, an online-based personal loans business. It also offers Core Digital Media, a online marketing platform in the mortgage and personal financial product sectors; Rocket Money, a personal finance app that helps clients manage every aspect of their financial lives; Lendesk, a software services company that provides a point of sale system for mortgage professionals and a loan origination system for private lenders; Rock Connections, a sales and support platform specializing in contact center services; and Rocket Innovation Studio that recruits and mentors top technology talent. In addition, the company originates, closes, sells, and services agency-conforming loans. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan. The company operates as a subsidiary of Rock Holdings Inc.

About Acacia Research

Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.