Head to Head Survey: Home Properties (HME) and AvalonBay Communities (AVB)
Home Properties (NYSE: HME) and AvalonBay Communities (NYSE:AVB) are both mid-cap residential reits companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.
Valuation & Earnings
This table compares Home Properties and AvalonBay Communities’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|AvalonBay Communities||$2.05 billion||12.38||$1.03 billion||$6.40||28.65|
AvalonBay Communities has higher revenue and earnings than Home Properties. AvalonBay Communities is trading at a lower price-to-earnings ratio than Home Properties, indicating that it is currently the more affordable of the two stocks.
AvalonBay Communities pays an annual dividend of $5.68 per share and has a dividend yield of 3.1%. Home Properties does not pay a dividend. AvalonBay Communities pays out 88.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Home Properties has increased its dividend for 5 consecutive years and AvalonBay Communities has increased its dividend for 6 consecutive years.
This is a summary of recent recommendations and price targets for Home Properties and AvalonBay Communities, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AvalonBay Communities has a consensus target price of $198.79, suggesting a potential upside of 8.40%. Given AvalonBay Communities’ higher probable upside, analysts plainly believe AvalonBay Communities is more favorable than Home Properties.
Insider and Institutional Ownership
97.7% of AvalonBay Communities shares are owned by institutional investors. 0.5% of AvalonBay Communities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares Home Properties and AvalonBay Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
AvalonBay Communities beats Home Properties on 11 of the 12 factors compared between the two stocks.
Home Properties Company Profile
Home Properties, Inc. (Home Properties) is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and repositions apartment communities in suburbs of metropolitan areas, primarily along the East Coast of the United States. The Company conducts its business through Home Properties, L.P. (the Operating Partnership), and a management company, Home Properties Resident Services, Inc. (HPRS). As of December 31, 2014, the Company owned and operated 121 communities with 42,107 apartment units. The Company’s properties are two- and three-story garden style apartment buildings in landscaped settings and brick or other masonry construction. As of December 31, 2014, approximately 26.6%, 24.9%, 14.0%, 8.5% and 8.5% of the Company’s Properties are located in the Washington, D.C., Baltimore, Philadelphia, Long Island and Northern New Jersey markets, respectively.
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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