Preferred Apartment Communities (NASDAQ: APTS) and Education Realty Trust (NYSE:EDR) are both financials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Profitability

This table compares Preferred Apartment Communities and Education Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Preferred Apartment Communities 4.66% -4.73% 0.51%
Education Realty Trust 10.58% 1.83% 1.25%

Earnings and Valuation

This table compares Preferred Apartment Communities and Education Realty Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Preferred Apartment Communities $249.98 million 2.60 $142.18 million N/A N/A
Education Realty Trust $310.48 million 8.59 $143.74 million $0.42 86.79

Education Realty Trust has higher revenue and earnings than Preferred Apartment Communities.

Dividends

Education Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 4.3%. Preferred Apartment Communities does not pay a dividend. Education Realty Trust pays out 371.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Education Realty Trust has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Preferred Apartment Communities and Education Realty Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Preferred Apartment Communities 0 1 3 0 2.75
Education Realty Trust 1 6 5 0 2.33

Preferred Apartment Communities currently has a consensus price target of $17.63, suggesting a potential downside of 9.48%. Education Realty Trust has a consensus price target of $42.63, suggesting a potential upside of 16.94%. Given Education Realty Trust’s higher probable upside, analysts plainly believe Education Realty Trust is more favorable than Preferred Apartment Communities.

Summary

Education Realty Trust beats Preferred Apartment Communities on 10 of the 12 factors compared between the two stocks.

About Preferred Apartment Communities

Preferred Apartment Communities, Inc. is a real estate investment trust (REIT). The Company is formed to acquire and operate multifamily properties in select targeted markets throughout the United States. It operates through segments, including multifamily communities, real estate related financing, new market properties and office buildings. The multifamily communities segment consists of its portfolio of owned residential multifamily communities. The real estate related financing segment consists of the Company’s portfolio of real estate loans, bridge loans, and other instruments deployed by it to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. The new market properties segment consists of its portfolio of grocery-anchored shopping centers. The office buildings segment consists of its three office buildings located in Atlanta, Georgia and Birmingham, Alabama.

About Education Realty Trust

Education Realty Trust, Inc. (EdR) is a self-managed and self-advised real estate investment trust (REIT). The Trust is engaged in developing, acquiring, owning and managing collegiate housing communities located near university campuses. The Trust operates through three segments: collegiate housing leasing, development consulting services and management services. The Trust develops collegiate housing communities for its own account and also provides third-party development consulting services on collegiate housing development projects for universities and other third parties. As of December 31, 2016, the Trust owned 64 collegiate housing communities located in 22 states containing 32,729 beds in 12,294 apartment units on or near 38 university campuses. As of December 31, 2016, the Trust provided third-party management services for 22 collegiate housing communities located in 11 states containing 11,767 beds in 4,214 apartment units on or near 17 university campuses.

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