Redfin vs Compass Which Should You Buy?

Redfin and Compass are both real estate technology companies that have gained significant attention in the market in recent years. Redfin, founded in 2004, offers online real estate services such as buying and selling homes, while Compass, founded in 2012, focuses on providing technology-driven services to real estate agents. Both companies have seen substantial growth in their stock prices, but their approaches and business models differ, leading to comparisons between the two in the investment community.

Redfin or Compass?

When comparing Redfin and Compass, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Redfin and Compass.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Redfin has a dividend yield of -%, while Compass has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Redfin reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Compass reports a 5-year dividend growth of 0.00% year and a payout ratio of -14.93%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Redfin P/E ratio at -7.84 and Compass's P/E ratio at -17.41. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Redfin P/B ratio is -18.19 while Compass's P/B ratio is 8.04.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Redfin has seen a 5-year revenue growth of 0.52%, while Compass's is 3.20%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Redfin's ROE at 1475.31% and Compass's ROE at -49.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $9.16 for Redfin and $6.59 for Compass. Over the past year, Redfin's prices ranged from $5.10 to $15.29, with a yearly change of 199.80%. Compass's prices fluctuated between $1.88 and $7.01, with a yearly change of 272.87%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.