Monogram Residential Trust (NYSE: MORE) and AvalonBay Communities (NYSE:AVB) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Dividends

Monogram Residential Trust pays an annual dividend of $0.30 per share and has a dividend yield of 2.5%. AvalonBay Communities pays an annual dividend of $5.68 per share and has a dividend yield of 3.2%. Monogram Residential Trust pays out 46.2% of its earnings in the form of a dividend. AvalonBay Communities pays out 78.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Monogram Residential Trust has increased its dividend for 5 consecutive years.

Volatility & Risk

Monogram Residential Trust has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, AvalonBay Communities has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Valuation and Earnings

This table compares Monogram Residential Trust and AvalonBay Communities’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Monogram Residential Trust $291.82 million 6.86 $144.44 million $0.65 18.45
AvalonBay Communities $2.05 billion 12.02 $1.30 billion $7.27 24.61

AvalonBay Communities has higher revenue and earnings than Monogram Residential Trust. Monogram Residential Trust is trading at a lower price-to-earnings ratio than AvalonBay Communities, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Monogram Residential Trust and AvalonBay Communities, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monogram Residential Trust 0 7 0 0 2.00
AvalonBay Communities 1 8 8 0 2.41

Monogram Residential Trust presently has a consensus price target of $11.75, suggesting a potential downside of 2.00%. AvalonBay Communities has a consensus price target of $197.50, suggesting a potential upside of 10.37%. Given AvalonBay Communities’ stronger consensus rating and higher probable upside, analysts plainly believe AvalonBay Communities is more favorable than Monogram Residential Trust.

Profitability

This table compares Monogram Residential Trust and AvalonBay Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monogram Residential Trust 37.63% 7.00% 3.42%
AvalonBay Communities 47.90% 9.88% 5.64%

Institutional & Insider Ownership

75.4% of Monogram Residential Trust shares are owned by institutional investors. Comparatively, 97.5% of AvalonBay Communities shares are owned by institutional investors. 0.1% of Monogram Residential Trust shares are owned by company insiders. Comparatively, 0.5% of AvalonBay Communities shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

AvalonBay Communities beats Monogram Residential Trust on 14 of the 17 factors compared between the two stocks.

Monogram Residential Trust Company Profile

Monogram Residential Trust, Inc. is a self-managed real estate investment trust (REIT). The Company invests in, develops and operates multifamily communities offering location and lifestyle amenities. The Company also invests in stabilized operating communities and communities in various phases of development, with a focus on communities in select markets across the United States. These include luxury high-rise, mid-rise and garden style multifamily communities. As of December 31, 2016, Monogram’s portfolio includes investments in 51 multifamily communities in 10 states comprising 14,473 residential units. As of September 30, 2016, the Company held ownership interests in equity investments, including 47 operating multifamily communities (including one development in lease up) containing 13,022 residential units in 10 states, all of which are consolidated for financial reporting purposes.

AvalonBay Communities Company Profile

AvalonBay Communities, Inc. is a real estate investment trust (REIT). The Company is focused on the development, redevelopment, acquisition, ownership and operation of multifamily communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. Its segments include Established Communities, Other Stabilized Communities and Development/Redevelopment Communities. As of June 30, 2017, the Company owned or held a direct or indirect ownership interest in 287 apartment communities containing 83,123 apartment homes in 10 states and the District of Columbia, of which 23 communities were under development and nine communities were under redevelopment. It operates its apartment communities under three core brands: Avalon, AVA and Eaves by Avalon. Its real estate investments consist of operating apartment communities, communities in various stages of development (Development Communities) and Development Rights.

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