Contrasting Mid-America Apartment Communities (MAA) & American Homes 4 Rent (AMH)
Mid-America Apartment Communities (NYSE: MAA) and American Homes 4 Rent (NYSE:AMH) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitabiliy, valuation and risk.
Volatility and Risk
Mid-America Apartment Communities has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500. Comparatively, American Homes 4 Rent has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.
This table compares Mid-America Apartment Communities and American Homes 4 Rent’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Mid-America Apartment Communities||17.03%||5.02%||2.65%|
|American Homes 4 Rent||1.92%||0.35%||0.21%|
Mid-America Apartment Communities pays an annual dividend of $3.48 per share and has a dividend yield of 3.4%. American Homes 4 Rent pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Mid-America Apartment Communities pays out 139.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Homes 4 Rent pays out -133.3% of its earnings in the form of a dividend. Mid-America Apartment Communities has raised its dividend for 6 consecutive years. Mid-America Apartment Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Mid-America Apartment Communities and American Homes 4 Rent’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Mid-America Apartment Communities||$1.24 billion||9.36||$698.30 million||$2.49||41.06|
|American Homes 4 Rent||$917.68 million||6.54||$455.79 million||($0.15)||-154.46|
Mid-America Apartment Communities has higher revenue and earnings than American Homes 4 Rent. American Homes 4 Rent is trading at a lower price-to-earnings ratio than Mid-America Apartment Communities, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and price targets for Mid-America Apartment Communities and American Homes 4 Rent, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Mid-America Apartment Communities||0||2||10||0||2.83|
|American Homes 4 Rent||0||5||5||0||2.50|
Mid-America Apartment Communities presently has a consensus target price of $107.36, indicating a potential upside of 5.01%. American Homes 4 Rent has a consensus target price of $24.29, indicating a potential upside of 4.82%. Given Mid-America Apartment Communities’ stronger consensus rating and higher probable upside, equities analysts clearly believe Mid-America Apartment Communities is more favorable than American Homes 4 Rent.
Institutional and Insider Ownership
92.1% of Mid-America Apartment Communities shares are owned by institutional investors. Comparatively, 93.8% of American Homes 4 Rent shares are owned by institutional investors. 1.3% of Mid-America Apartment Communities shares are owned by insiders. Comparatively, 27.8% of American Homes 4 Rent shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Mid-America Apartment Communities beats American Homes 4 Rent on 12 of the 17 factors compared between the two stocks.
Mid-America Apartment Communities Company Profile
Mid-America Apartment Communities, Inc. is a multifamily focused, self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and develops apartment communities primarily located in the Southeast and Southwest regions of the United States. It operates through three segments: Large market same store, Secondary market same store and Non-Same Store and Other. Its Large market same store communities are communities in markets with a population of at least one million and at least 1% of the total public multifamily REIT units that it has owned. Its Secondary market same store communities are communities in markets with populations of more than one million but less than 1% of the total public multifamily REIT units or markets with populations of less than one million that it has owned. Its Non-same store communities and other includes recent acquisitions and communities in development or lease-up communities.
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).
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