Reviewing Independence Realty Trust (IRT) & AvalonBay Communities (AVB)
Independence Realty Trust (NYSE: IRT) and AvalonBay Communities (NYSE:AVB) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Independence Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 7.1%. AvalonBay Communities pays an annual dividend of $5.68 per share and has a dividend yield of 3.0%. Independence Realty Trust pays out -313.0% of its earnings in the form of a dividend. AvalonBay Communities pays out 78.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities has increased its dividend for 5 consecutive years. Independence Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and recommmendations for Independence Realty Trust and AvalonBay Communities, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independence Realty Trust||0||0||5||0||3.00|
Independence Realty Trust currently has a consensus price target of $10.45, indicating a potential upside of 2.55%. AvalonBay Communities has a consensus price target of $196.93, indicating a potential upside of 5.44%. Given AvalonBay Communities’ higher possible upside, analysts plainly believe AvalonBay Communities is more favorable than Independence Realty Trust.
Volatility and Risk
Independence Realty Trust has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, AvalonBay Communities has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500.
Earnings and Valuation
This table compares Independence Realty Trust and AvalonBay Communities’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Independence Realty Trust||$155.10 million||4.54||$30.95 million||($0.23)||-44.30|
|AvalonBay Communities||$2.05 billion||12.55||$1.30 billion||$7.27||25.69|
AvalonBay Communities has higher revenue and earnings than Independence Realty Trust. Independence Realty Trust is trading at a lower price-to-earnings ratio than AvalonBay Communities, indicating that it is currently the more affordable of the two stocks.
This table compares Independence Realty Trust and AvalonBay Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independence Realty Trust||-10.28%||-3.22%||-1.22%|
Insider and Institutional Ownership
74.8% of Independence Realty Trust shares are held by institutional investors. Comparatively, 97.5% of AvalonBay Communities shares are held by institutional investors. 0.6% of Independence Realty Trust shares are held by insiders. Comparatively, 0.5% of AvalonBay Communities shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
AvalonBay Communities beats Independence Realty Trust on 12 of the 17 factors compared between the two stocks.
About Independence Realty Trust
Independence Realty Trust, Inc. is an internally-managed real estate investment trust (REIT). The Company is engaged in the business of owning, managing, operating, leasing, acquiring, developing, investing in, and disposing of real estate assets. The Company owns apartment properties in geographic non-gateway markets. As of July 5, 2017, the Company owns and operates 47 multifamily apartment properties, totaling 13,198 units. Its properties include Copper Mill, Crestmont, Heritage Trace, Runaway Bay, Berkshire Square, The Crossings, Reserve at Eagle Ridge, Windrush, Heritage Park, Raindance, Augusta, Invitational, Carrington Park, Walnut Hill, Lenoxplace, Bennington Pond, Jamestown, Meadows, Oxmoor, Bayview Club, Arbors River Oaks, Fox Trails, Bridge Pointe, The Aventine Greenville and Westmont Commons.
About AvalonBay Communities
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 January 31, 2017, it owned or held a direct or indirect ownership interest in 259 operating apartment communities containing 75,038 apartment homes in 10 states and the District of Columbia; 27 communities under development, and rights to develop an additional 25 communities. 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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