ARMOUR Residential REIT (ARR) vs. American Campus Communities (ACC) Critical Survey
ARMOUR Residential REIT (NYSE: ARR) and American Campus Communities (NYSE:ACC) are both financials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.
Earnings & Valuation
This table compares ARMOUR Residential REIT and American Campus Communities’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ARMOUR Residential REIT||$263.99 million||4.02||-$45.51 million||$5.06||5.01|
|American Campus Communities||$786.36 million||7.06||$99.06 million||$0.41||99.22|
Volatility and Risk
ARMOUR Residential REIT has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, American Campus Communities has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for ARMOUR Residential REIT and American Campus Communities, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ARMOUR Residential REIT||0||0||0||0||N/A|
|American Campus Communities||1||5||8||0||2.50|
American Campus Communities has a consensus target price of $50.60, suggesting a potential upside of 24.39%. Given American Campus Communities’ higher probable upside, analysts clearly believe American Campus Communities is more favorable than ARMOUR Residential REIT.
This table compares ARMOUR Residential REIT and American Campus Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ARMOUR Residential REIT||76.46%||9.39%||1.37%|
|American Campus Communities||7.16%||1.58%||0.89%|
Institutional and Insider Ownership
58.2% of ARMOUR Residential REIT shares are held by institutional investors. 1.5% of ARMOUR Residential REIT shares are held by company insiders. Comparatively, 0.7% of American Campus Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
ARMOUR Residential REIT pays an annual dividend of $2.28 per share and has a dividend yield of 9.0%. American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 4.3%. ARMOUR Residential REIT pays out 45.1% of its earnings in the form of a dividend. American Campus Communities pays out 429.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ARMOUR Residential REIT has raised its dividend for 2 consecutive years and American Campus Communities has raised its dividend for 4 consecutive years. ARMOUR Residential REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.
ARMOUR Residential REIT beats American Campus Communities on 9 of the 16 factors compared between the two stocks.
About ARMOUR Residential REIT
ARMOUR Residential REIT, Inc. is a real estate investment trust. The Company invests in and manages a leveraged portfolio of mortgage-backed securities (MBS) and mortgage loans. The Company invests in residential mortgage backed securities issued or guaranteed by a United States Government-sponsored enterprise (GSE), such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, or a government agency, such as the Government National Mortgage Association (collectively, Agency Securities). The Company also invests in Interest-Only Securities, which are the interest portions of Agency Securities that are separated and sold individually from the principal portion of the same payment. The Company raises funds for additional funding through equity offerings (including preferred equity), unsecured debt securities and convertible securities (including warrants, preferred equity and debt), among others. It is managed by ARMOUR Capital Management LP.
About American Campus Communities
American Campus Communities, Inc. is a self-managed and self-administered equity real estate investment trust (REIT). The Company’s segments include Wholly-Owned Properties, On-Campus Participating Properties, Development Services, and Property Management Services. It is engaged in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. The Wholly-Owned Properties segment consists of off-campus properties, which are located in close proximity to the school campus. The On-Campus Participating Properties segment includes on-campus properties that are operated under long-term ground/facility leases with three university systems. The Development Services segment consists of development and construction management services that it provides through one of its taxable REIT subsidiaries for third-party owners. The Property Management Services segment includes revenues generated from third-party management contracts.
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