Head to Head Analysis: istar (STAR) and CIM Commercial Trust (NASDAQ:CMCT)

istar (NYSE: STAR) and CIM Commercial Trust (NASDAQ:CMCT) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

87.5% of istar shares are held by institutional investors. Comparatively, 1.1% of CIM Commercial Trust shares are held by institutional investors. 4.4% of istar shares are held by company insiders. Comparatively, 98.1% of CIM Commercial Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares istar and CIM Commercial Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
istar 24.13% 19.57% 3.97%
CIM Commercial Trust 143.13% 40.88% 19.12%

Dividends

CIM Commercial Trust pays an annual dividend of $0.50 per share and has a dividend yield of 2.8%. istar does not pay a dividend.

Volatility & Risk

istar has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, CIM Commercial Trust has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500.

Valuation and Earnings

This table compares istar and CIM Commercial Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
istar $477.03 million 1.64 $95.30 million $0.91 12.62
CIM Commercial Trust $265.93 million 3.91 $34.54 million N/A N/A

istar has higher revenue and earnings than CIM Commercial Trust.

Analyst Ratings

This is a summary of current recommendations and price targets for istar and CIM Commercial Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
istar 0 2 0 0 2.00
CIM Commercial Trust 0 0 0 0 N/A

istar currently has a consensus target price of $14.00, suggesting a potential upside of 21.95%. Given istar’s higher probable upside, research analysts clearly believe istar is more favorable than CIM Commercial Trust.

Summary

CIM Commercial Trust beats istar on 7 of the 12 factors compared between the two stocks.

istar Company Profile

iStar Inc. finances, invests in and develops real estate and real estate related projects as part of its integrated investment platform. The Company’s four business segments are Real Estate Finance, Net Lease, Operating Properties, and Land and Development. The Real Estate Finance portfolio consists of senior and mezzanine real estate loans that may be either fixed-rate or variable-rate. The Net Lease portfolio consists of properties owned by the Company and leased to single tenants, where the properties are subject to long-term leases. The Operating Properties portfolio consists of commercial and residential properties, which represent a pool of assets across a range of geographies and property types. The Land and Development portfolio consists of land entitled for master planned communities, as well as waterfront and urban infill land parcels located throughout the United States. Its Land and Development projects include Great Oaks, Sage Scottsdale, Naples Reserve and Coney Island.

CIM Commercial Trust Company Profile

CIM Commercial Trust Corporation, together with its subsidiaries, primarily invests in, owns, and operates Class A and office investments in urban communities throughout the United States. These communities are located in areas that include traditional downtown areas and suburban main streets. The Company’s segments are office, hotel, multifamily and lending. The products for its office segment primarily include rental of office space and other tenant services, including tenant reimbursements, parking, and storage space rental. The products for its multifamily segment include rental of apartments and other tenant services. The products for its hotel segment include revenues generated from the operations of hotel properties and rental income generated from a garage located directly across the street from one of the hotels. The Company is managed by affiliates of CIM Group, L.P. (CIM), a vertically integrated, full-service investment manager.

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