Silver Bay Realty Trust (NYSE: SBY) and Independence Realty Trust (NYSE:IRT) are both residential reits companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Insider and Institutional Ownership

73.6% of Silver Bay Realty Trust shares are owned by institutional investors. Comparatively, 78.7% of Independence Realty Trust shares are owned by institutional investors. 7.3% of Silver Bay Realty Trust shares are owned by insiders. Comparatively, 0.6% of Independence Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Silver Bay Realty Trust and Independence Realty Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Silver Bay Realty Trust N/A N/A N/A ($0.07) -307.00
Independence Realty Trust $153.36 million 5.50 -$9.80 million ($0.26) -38.85

Silver Bay Realty Trust has higher earnings, but lower revenue than Independence Realty Trust. Silver Bay Realty Trust is trading at a lower price-to-earnings ratio than Independence Realty Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Silver Bay Realty Trust and Independence Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silver Bay Realty Trust -5.71% -1.42% -0.61%
Independence Realty Trust -10.91% -3.08% -1.28%

Dividends

Silver Bay Realty Trust pays an annual dividend of $0.52 per share and has a dividend yield of 2.4%. Independence Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 7.1%. Silver Bay Realty Trust pays out -742.9% of its earnings in the form of a dividend. Independence Realty Trust pays out -276.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Silver Bay Realty Trust has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Silver Bay Realty Trust and Independence Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silver Bay Realty Trust 0 3 0 0 2.00
Independence Realty Trust 0 1 5 0 2.83

Silver Bay Realty Trust currently has a consensus target price of $20.25, suggesting a potential downside of 5.77%. Independence Realty Trust has a consensus target price of $11.20, suggesting a potential upside of 10.89%. Given Independence Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Independence Realty Trust is more favorable than Silver Bay Realty Trust.

Summary

Silver Bay Realty Trust beats Independence Realty Trust on 7 of the 13 factors compared between the two stocks.

About Silver Bay Realty Trust

Silver Bay Realty Trust Corp. is a real estate investment trust. It focuses on the acquisition, renovation, leasing and management of single-family properties in select markets in the United States. As of December 31, 2016, it had owned 9,044 single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio, South Carolina and Texas. Its investments in real estate consist of single-family properties located in various select markets, including Atlanta, Phoenix, Tampa, Charlotte, Orlando, Dallas, Jacksonville, Northern California, Las Vegas, Columbus, Tucson and Southeast Florida. The Charlotte market includes properties in South Carolina due to its proximity to Charlotte, North Carolina. The Northern California market consists of Contra Costa, Napa and Solano counties. The Southeast Florida market consists of Miami-Dade, Broward and Palm Beach counties. It conducts business and owns all of its properties through Silver Bay Operating Partnership L.P.

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 September 26, 2017, the Company owns and operates 55 multifamily apartment properties, totaling 15,165 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.

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