Home Properties (NYSE: HME) and Colony Capital (NYSE:CLNY) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

94.1% of Colony Capital shares are held by institutional investors. 17.7% of Colony Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Home Properties and Colony Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Home Properties 0 0 0 0 N/A
Colony Capital 0 1 2 0 2.67

Colony Capital has a consensus price target of $27.50, suggesting a potential upside of 27.79%. Given Colony Capital’s higher possible upside, analysts plainly believe Colony Capital is more favorable than Home Properties.

Valuation & Earnings

This table compares Home Properties and Colony Capital’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Home Properties N/A N/A N/A N/A N/A
Colony Capital N/A N/A N/A $0.89 24.18

Profitability

This table compares Home Properties and Colony Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Home Properties 18.18% 6.60% 2.87%
Colony Capital 31.43% 3.16% 2.88%

Dividends

Colony Capital pays an annual dividend of $1.60 per share and has a dividend yield of 7.4%. Home Properties does not pay a dividend. Colony Capital pays out 179.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Home Properties has raised its dividend for 6 consecutive years and Colony Capital has raised its dividend for 7 consecutive years.

Summary

Colony Capital beats Home Properties on 8 of the 10 factors compared between the two stocks.

Home Properties Company Profile

Home Properties, Inc. (Home Properties) is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and repositions apartment communities in suburbs of metropolitan areas, primarily along the East Coast of the United States. The Company conducts its business through Home Properties, L.P. (the Operating Partnership), and a management company, Home Properties Resident Services, Inc. (HPRS). As of December 31, 2014, the Company owned and operated 121 communities with 42,107 apartment units. The Company’s properties are two- and three-story garden style apartment buildings in landscaped settings and brick or other masonry construction. As of December 31, 2014, approximately 26.6%, 24.9%, 14.0%, 8.5% and 8.5% of the Company’s Properties are located in the Washington, D.C., Baltimore, Philadelphia, Long Island and Northern New Jersey markets, respectively.

Colony Capital Company Profile

Colony Capital, Inc., formerly Colony Financial, Inc., is a global real estate and investment management company. The Company operates through five segments: Real Estate Equity, including Light industrial real estate assets and operating platform; Single-family residential rentals through an investment in Colony Starwood Homes and Other real estate equity investments; Real Estate Debt, which includes loan originations and acquisitions, and Investment Management, which includes investment management of the Company-sponsored funds and other investment vehicles. Through its global investment management business, it has over $18.8 billion of assets under management. Its business objective is to provide risk-adjusted returns to its investors through a diversified portfolio of direct and indirect real estate-related equity and real estate debt investments, and fee bearing management contracts on investment funds that it manages.

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