Head-To-Head Review: Realogy Holdings Corp. (RLGY) & Zillow Group (Z)

Zillow Group (NASDAQ: Z) and Realogy Holdings Corp. (NYSE:RLGY) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Institutional and Insider Ownership

90.0% of Zillow Group shares are owned by institutional investors. 27.0% of Zillow Group shares are owned by company insiders. Comparatively, 1.8% of Realogy Holdings Corp. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Zillow Group and Realogy Holdings Corp., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zillow Group 0 3 5 0 2.63
Realogy Holdings Corp. 1 2 5 0 2.50

Zillow Group presently has a consensus target price of $46.06, suggesting a potential upside of 19.21%. Realogy Holdings Corp. has a consensus target price of $35.25, suggesting a potential upside of 4.14%. Given Zillow Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Zillow Group is more favorable than Realogy Holdings Corp..

Earnings and Valuation

This table compares Zillow Group and Realogy Holdings Corp.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Zillow Group $964.83 million 7.43 $35.12 million ($0.24) -161.00
Realogy Holdings Corp. $6.01 billion 0.77 $758.00 million $1.71 19.80

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

Profitability

This table compares Zillow Group and Realogy Holdings Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zillow Group -4.47% -0.40% -0.33%
Realogy Holdings Corp. 4.06% 9.53% 3.13%

Volatility and Risk

Zillow Group has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Realogy Holdings Corp. has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Dividends

Realogy Holdings Corp. pays an annual dividend of $0.36 per share and has a dividend yield of 1.1%. Zillow Group does not pay a dividend. Realogy Holdings Corp. pays out 21.1% of its earnings in the form of a dividend.

Summary

Realogy Holdings Corp. beats Zillow Group on 8 of the 14 factors compared between the two stocks.

About Realogy Holdings Corp.

Realogy Holdings Corp. is an integrated provider of residential real estate services in the United States. The Company is the franchisor of residential real estate brokerages with some of the recognized brands in the real estate industry, the owner of United States residential real estate brokerage offices, the global provider of outsourced employee relocation services and a provider of title and settlement services. The Company’s operating platform is supported by the Company’s portfolio of industry franchise brokerage brands, including Century 21 , Coldwell Banker , Coldwell Banker Commercial , ERA , Sotheby’s International Realty and Better Homes and Gardens Real Estate and the Company also owns and operates the Corcoran Group and CitiHabitats brands. On August 14, 2014, Realogy Holdings Corp, through its Realogy Group LLC wholly owned subsidiary, acquired ZipRealty Inc (ZipRealty).

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