Analyzing Altisource Residential Corporation (RESI) & Colony Starwood Homes (SFR)
Altisource Residential Corporation (NYSE: RESI) and Colony Starwood Homes (NYSE:SFR) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.
Risk and Volatility
Altisource Residential Corporation has a beta of 1.96, suggesting that its share price is 96% more volatile than the S&P 500. Comparatively, Colony Starwood Homes has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.
This table compares Altisource Residential Corporation and Colony Starwood Homes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Altisource Residential Corporation||-266.58%||-21.64%||-8.15%|
|Colony Starwood Homes||-7.41%||-1.11%||-0.48%|
Earnings and Valuation
This table compares Altisource Residential Corporation and Colony Starwood Homes’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Altisource Residential Corporation||$56.76 million||10.30||-$228.02 million||($3.90)||-2.81|
|Colony Starwood Homes||$575.68 million||8.54||-$81.26 million||($0.40)||-95.75|
Colony Starwood Homes has higher revenue and earnings than Altisource Residential Corporation. Colony Starwood Homes is trading at a lower price-to-earnings ratio than Altisource Residential Corporation, indicating that it is currently the more affordable of the two stocks.
Altisource Residential Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 5.5%. Colony Starwood Homes pays an annual dividend of $0.88 per share and has a dividend yield of 2.3%. Altisource Residential Corporation pays out -15.4% of its earnings in the form of a dividend. Colony Starwood Homes pays out -220.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Colony Starwood Homes has increased its dividend for 3 consecutive years.
Institutional and Insider Ownership
72.1% of Altisource Residential Corporation shares are owned by institutional investors. 0.5% of Altisource Residential Corporation shares are owned by company insiders. Comparatively, 5.0% of Colony Starwood Homes shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Altisource Residential Corporation and Colony Starwood Homes, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Altisource Residential Corporation||0||4||4||0||2.50|
|Colony Starwood Homes||0||5||6||0||2.55|
Altisource Residential Corporation currently has a consensus target price of $15.57, indicating a potential upside of 42.33%. Colony Starwood Homes has a consensus target price of $36.90, indicating a potential downside of 3.66%. Given Altisource Residential Corporation’s higher possible upside, equities research analysts clearly believe Altisource Residential Corporation is more favorable than Colony Starwood Homes.
Colony Starwood Homes beats Altisource Residential Corporation on 11 of the 16 factors compared between the two stocks.
About Altisource Residential Corporation
Altisource Residential Corporation is a real estate investment trust (REIT). The Company focuses on acquiring, owning and managing single-family rental (SFR) properties throughout the United States. The Company conducts its activities through its subsidiary, Altisource Residential, L.P., and its subsidiaries. The Company also converts a portion of the real estate owned (REO) properties that it acquires through resolution of its mortgage loans into SFR properties. The Company has also entered into property management service agreements with two third-party property managers: Altisource Portfolio Solutions, SA (ASPS) and Main Street Renewal, LLC (MSR), to provide, among other things, leasing and lease management, operations, maintenance, repair and property management services in respect of its SFR portfolios. As of December 31, 2016, the Company had 10,533 properties, consisting of 9,939 properties held for use and 594 held for sale.
About Colony Starwood Homes
Starwood Waypoint Homes, formerly Colony Starwood Homes, is an internally managed real estate investment trust (REIT). The Company was formed primarily to acquire, renovate, lease and manage residential assets in select markets across the United States. It is focused on acquiring single-family rental (SFR) homes through a variety of channels, renovating these homes to the extent necessary and leasing them to qualified residents. The Company operates through two segments, which are represented by its portfolio of SFR homes and its portfolio of NPLs owned in the joint venture with Prime Asset Fund VI, LLC (Prime). The Company identifies and pursues individual home acquisition opportunities through various sources, including multiple listing services (MLS) listings, foreclosure auctions and short sales. As of December 31, 2016, its SFR portfolio consisted of 31,684 owned homes, including 31,065 rental homes and 619 homes that it does not intend to hold for the long term.
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