American Homes 4 Rent (NYSE: AMH) and Equity Lifestyle Properties (NYSE:ELS) are both mid-cap financials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Valuation & Earnings

This table compares American Homes 4 Rent and Equity Lifestyle Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Homes 4 Rent $934.38 million 6.11 $473.25 million ($0.11) -200.55
Equity Lifestyle Properties $897.06 million 8.36 $426.41 million $2.01 42.86

American Homes 4 Rent has higher revenue and earnings than Equity Lifestyle Properties. American Homes 4 Rent is trading at a lower price-to-earnings ratio than Equity Lifestyle Properties, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

American Homes 4 Rent has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Equity Lifestyle Properties has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.

Institutional & Insider Ownership

92.8% of American Homes 4 Rent shares are held by institutional investors. Comparatively, 96.6% of Equity Lifestyle Properties shares are held by institutional investors. 27.8% of American Homes 4 Rent shares are held by company insiders. Comparatively, 6.1% of Equity Lifestyle Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares American Homes 4 Rent and Equity Lifestyle Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Homes 4 Rent 6.36% -0.02% 0.73%
Equity Lifestyle Properties 22.00% 20.64% 5.66%

Analyst Recommendations

This is a summary of recent ratings and price targets for American Homes 4 Rent and Equity Lifestyle Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Homes 4 Rent 0 5 4 0 2.44
Equity Lifestyle Properties 1 1 1 0 2.00

American Homes 4 Rent currently has a consensus price target of $24.29, indicating a potential upside of 10.09%. Equity Lifestyle Properties has a consensus price target of $78.67, indicating a potential downside of 8.69%. Given American Homes 4 Rent’s stronger consensus rating and higher possible upside, research analysts clearly believe American Homes 4 Rent is more favorable than Equity Lifestyle Properties.

Dividends

American Homes 4 Rent pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Equity Lifestyle Properties pays an annual dividend of $1.95 per share and has a dividend yield of 2.3%. American Homes 4 Rent pays out -181.8% of its earnings in the form of a dividend. Equity Lifestyle Properties pays out 97.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Homes 4 Rent has raised its dividend for 6 consecutive years.

Summary

American Homes 4 Rent beats Equity Lifestyle Properties on 9 of the 16 factors compared between the two stocks.

American Homes 4 Rent Company Profile

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).

Equity Lifestyle Properties Company Profile

Equity LifeStyle Properties, Inc. is a real estate investment trust (REIT). The Company is an owner and operator of lifestyle-oriented properties (properties) consisting primarily of manufactured home (MH) communities and recreational vehicle (RV) resorts and campgrounds. The Company operates through two segments: Property Operations and Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease properties and the Home Sales and Rentals Operations segment purchases, sells and leases homes at the properties. It leases individual developed areas (sites) with access to utilities for placement of factory built homes, cottages, cabins or RVs. As of December 31, 2016, the Company’s property portfolio included 391 properties consisted of 146,610 residential sites. Its properties are designed for home options of various sizes and designs that are produced off-site by third-party manufacturers, installed and set on designated sites within the properties.

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