Head-To-Head Analysis: Starwood Waypoint Homes (SFR) vs. American Homes 4 Rent (AMH)
Starwood Waypoint Homes (NYSE: SFR) and American Homes 4 Rent (NYSE:AMH) are both mid-cap residential reits companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.
Earnings & Valuation
This table compares Starwood Waypoint Homes and American Homes 4 Rent’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Starwood Waypoint Homes||$575.68 million||8.28||-$81.26 million||($0.28)||-132.61|
|American Homes 4 Rent||$878.89 million||7.28||$6.69 million||($0.01)||-2,232.00|
This is a breakdown of recent ratings for Starwood Waypoint Homes and American Homes 4 Rent, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Waypoint Homes||0||4||6||0||2.60|
|American Homes 4 Rent||0||1||8||0||2.89|
Starwood Waypoint Homes currently has a consensus target price of $37.50, indicating a potential upside of 1.00%. American Homes 4 Rent has a consensus target price of $25.22, indicating a potential upside of 13.00%. Given American Homes 4 Rent’s stronger consensus rating and higher probable upside, analysts plainly believe American Homes 4 Rent is more favorable than Starwood Waypoint Homes.
Institutional and Insider Ownership
88.2% of American Homes 4 Rent shares are held by institutional investors. 5.0% of Starwood Waypoint Homes shares are held by company insiders. Comparatively, 27.8% of American Homes 4 Rent shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Starwood Waypoint Homes and American Homes 4 Rent’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Starwood Waypoint Homes||-7.41%||-1.07%||-0.47%|
|American Homes 4 Rent||6.56%||1.15%||0.75%|
Risk and Volatility
Starwood Waypoint Homes has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, American Homes 4 Rent has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.
Starwood Waypoint Homes pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. American Homes 4 Rent pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Starwood Waypoint Homes pays out -314.3% of its earnings in the form of a dividend. American Homes 4 Rent pays out -2,000.0% 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.
American Homes 4 Rent beats Starwood Waypoint Homes on 13 of the 16 factors compared between the two stocks.
About Starwood Waypoint 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.
About American Homes 4 Rent
American Homes 4 Rent is an internally managed real estate investment trust (REIT) focused on acquiring, renovating, leasing and operating single-family homes as rental properties. The Company’s primary objective is to generate attractive risk-adjusted returns for its shareholders through dividends and capital appreciation by acquiring, renovating, leasing and operating single-family homes as rental properties. As of December 31, 2016, it owned 48,422 single-family properties in 22 states, including 1,119 properties held for sale, and had an additional 47 properties in escrow that it intended to acquire. Its integrated operating platform offers property management, acquisitions, construction, marketing, leasing, financial and administrative functions. The Company may seek to invest in condominium units, townhouses and real estate-related debt investments. The Company is externally managed and advised by American Homes 4 Rent Advisor, LLC (the Advisor).
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