AvalonBay Communities (NYSE: AVB) and Bluerock Residential Growth REIT (NYSE:BRG) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings for AvalonBay Communities and Bluerock Residential Growth REIT, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AvalonBay Communities 1 8 8 0 2.41
Bluerock Residential Growth REIT 0 1 2 0 2.67

AvalonBay Communities presently has a consensus target price of $197.50, indicating a potential upside of 10.64%. Bluerock Residential Growth REIT has a consensus target price of $13.62, indicating a potential upside of 20.61%. Given Bluerock Residential Growth REIT’s stronger consensus rating and higher probable upside, analysts plainly believe Bluerock Residential Growth REIT is more favorable than AvalonBay Communities.

Profitability

This table compares AvalonBay Communities and Bluerock Residential Growth REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AvalonBay Communities 47.90% 9.88% 5.64%
Bluerock Residential Growth REIT 128.54% 30.92% 10.01%

Valuation & Earnings

This table compares AvalonBay Communities and Bluerock Residential Growth REIT’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AvalonBay Communities $2.05 billion 11.99 $1.30 billion $7.27 24.55
Bluerock Residential Growth REIT N/A N/A N/A N/A N/A

AvalonBay Communities has higher revenue and earnings than Bluerock Residential Growth REIT.

Dividends

AvalonBay Communities pays an annual dividend of $5.68 per share and has a dividend yield of 3.2%. Bluerock Residential Growth REIT does not pay 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. Bluerock Residential Growth REIT has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

97.5% of AvalonBay Communities shares are held by institutional investors. 0.5% of AvalonBay Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Bluerock Residential Growth REIT beats AvalonBay Communities on 7 of the 12 factors compared between the two stocks.

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.

Bluerock Residential Growth REIT Company Profile

Bluerock Residential Growth REIT, Inc. is a real estate investment trust. The Company is focused on acquiring a portfolio of residential real estate assets. As of December 31, 2016, the Company’s portfolio consisted of interests in 31 properties (21 operating and 10 development properties). As of December 31, 2016, its properties contained an aggregate of 9,570 units, consisting of 6,972 operating units and 2,598 units under development. As of December 31, 2016, its operating properties included ARIUM at Palmer Ranch, Sarasota; ARIUM Grandewood, Orlando; ARIUM Gulfshore, Naples; ARIUM Palms, Orlando; ARIUM Pine Lakes, Port St. Lucie; ARIUM Westside, Atlanta; Ashton Reserve, Charlotte; Enders at Baldwin Park, Orlando; Fox Hill, Austin; Lansbrook Village, Palm Harbor; Legacy at Southpark, Austin; Nevadan, Atlanta; Roswell City Walk, Roswell; Sorrel, Frisco; Sovereign, Fort Worth; The Preserve at Henderson Beach, Destin; Village Green of Ann Arbor, Ann Arbor, and Whetstone, Durham.

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