American Campus Communities (NYSE: ACC) and Silver Bay Realty Trust (NYSE:SBY) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares American Campus Communities and Silver Bay Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Campus Communities 7.16% 1.58% 0.89%
Silver Bay Realty Trust -5.71% -1.42% -0.61%

Dividends

American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 4.7%. Silver Bay Realty Trust pays an annual dividend of $0.52 per share and has a dividend yield of 2.4%. 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. Silver Bay Realty Trust pays out -742.9% of its earnings in the form of a dividend. American Campus Communities has increased its dividend for 4 consecutive years and Silver Bay Realty Trust has increased its dividend for 5 consecutive years.

Valuation & Earnings

This table compares American Campus Communities and Silver Bay Realty Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Campus Communities $786.36 million 6.46 $99.06 million $0.41 90.83
Silver Bay Realty Trust N/A N/A N/A ($0.07) -307.00

American Campus Communities has higher revenue and earnings than Silver Bay Realty Trust. Silver Bay Realty Trust is trading at a lower price-to-earnings ratio than American Campus Communities, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

73.6% of Silver Bay Realty Trust shares are owned by institutional investors. 0.7% of American Campus Communities shares are owned by company insiders. Comparatively, 7.3% of Silver Bay Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for American Campus Communities and Silver Bay Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Campus Communities 1 4 9 0 2.57
Silver Bay Realty Trust 0 3 0 0 2.00

American Campus Communities currently has a consensus price target of $49.50, suggesting a potential upside of 32.92%. Silver Bay Realty Trust has a consensus price target of $20.25, suggesting a potential downside of 5.77%. Given American Campus Communities’ stronger consensus rating and higher possible upside, research analysts clearly believe American Campus Communities is more favorable than Silver Bay Realty Trust.

Summary

American Campus Communities beats Silver Bay Realty Trust on 10 of the 14 factors compared between the two stocks.

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.

About Silver Bay Realty Trust

Silver Bay Realty Trust Corp. is a real estate investment trust. It focuses on the acquisition, renovation, leasing and management of single-family properties in select markets in the United States. As of December 31, 2016, it had owned 9,044 single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio, South Carolina and Texas. Its investments in real estate consist of single-family properties located in various select markets, including Atlanta, Phoenix, Tampa, Charlotte, Orlando, Dallas, Jacksonville, Northern California, Las Vegas, Columbus, Tucson and Southeast Florida. The Charlotte market includes properties in South Carolina due to its proximity to Charlotte, North Carolina. The Northern California market consists of Contra Costa, Napa and Solano counties. The Southeast Florida market consists of Miami-Dade, Broward and Palm Beach counties. It conducts business and owns all of its properties through Silver Bay Operating Partnership L.P.

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