Critical Analysis: FirstService (FSV) & Its Peers

FirstService (NASDAQ:FSV) is one of 329 publicly-traded companies in the “Real Estate Management & Development” industry, but how does it compare to its rivals? We will compare FirstService to related businesses based on the strength of its risk, valuation, earnings, profitability, dividends, institutional ownership and analyst recommendations.

Dividends

FirstService pays an annual dividend of $1.22 per share and has a dividend yield of 0.8%. FirstService pays out 37.2% of its earnings in the form of a dividend. As a group, “Real Estate Management & Development” companies pay a dividend yield of 5.8% and pay out 49.1% of their earnings in the form of a dividend. FirstService has raised its dividend for 7 consecutive years.

Earnings & Valuation

This table compares FirstService and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
FirstService	$5.68 billion	$145.05 million	46.68
FirstService Competitors	$2.69 billion	-$400.38 million	27.49

FirstService has higher revenue and earnings than its rivals. FirstService is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for FirstService and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstService	0	4	8	0	2.67
FirstService Competitors	1583	4692	7449	209	2.45

FirstService presently has a consensus target price of $179.82, indicating a potential upside of 17.44%. As a group, “Real Estate Management & Development” companies have a potential upside of 22.42%. Given FirstService’s rivals higher possible upside, analysts clearly believe FirstService has less favorable growth aspects than its rivals.

Risk and Volatility

FirstService has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, FirstService’s rivals have a beta of -0.20, meaning that their average stock price is 120% less volatile than the S&P 500.

Institutional and Insider Ownership

69.3% of FirstService shares are owned by institutional investors. Comparatively, 32.4% of shares of all “Real Estate Management & Development” companies are owned by institutional investors. 27.1% of shares of all “Real Estate Management & Development” companies 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FirstService	2.59%	19.66%	5.61%
FirstService Competitors	-264.49%	-683.07%	-1.20%

Summary

FirstService beats its rivals on 11 of the 15 factors compared.

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.