Critical Review: Associated Estates Realty (AEC) & Post Properties (PPS)

Associated Estates Realty (NYSE: AEC) and Post Properties (NYSE:PPS) are both residential reits companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Earnings and Valuation

This table compares Associated Estates Realty and Post Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Associated Estates Realty N/A N/A N/A $1.20 23.96
Post Properties N/A N/A N/A $1.43 45.47

Associated Estates Realty is trading at a lower price-to-earnings ratio than Post Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

Post Properties pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Associated Estates Realty does not pay a dividend. Post Properties pays out 131.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Associated Estates Realty has raised its dividend for 6 consecutive years and Post Properties has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Associated Estates Realty and Post Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Associated Estates Realty 0 0 0 0 N/A
Post Properties 0 0 0 0 N/A

Profitability

This table compares Associated Estates Realty and Post Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Associated Estates Realty 60.04% 18.10% 7.71%
Post Properties 17.36% 5.79% 3.07%

Insider and Institutional Ownership

94.3% of Post Properties shares are owned by institutional investors. 2.2% of Post Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Associated Estates Realty beats Post Properties on 5 of the 9 factors compared between the two stocks.

About Associated Estates Realty

Associated Estates Realty Corporation is a self-administered and self-managed equity real estate investment trust (REIT). The Company is engaged primarily in the ownership and operation of multifamily apartment units. It specializes in multifamily ownership, operation, acquisition, development, disposition and property management activities. Its operating portfolio consists of approximately 49 apartment communities containing around 12,734 units in eight states that are owned, either directly or indirectly, through its subsidiaries. It also owns a commercial building in Los Angeles, California containing approximately 78,800 total square feet of office and commercial space. The Company also earns revenue from rental payments from the leasing of apartment units. It owns a taxable REIT subsidiary, which performs construction management services in connection with the development of multifamily properties that it owns, including consolidated and unconsolidated joint ventures.

About Post Properties

Post Properties, Inc. is a self-administrated and self-managed equity real estate investment trust (REIT). The Company’s segments include Fully stabilized (same store) communities, which includes apartment communities that have been stabilized for both the current and prior year; Newly stabilized communities, which includes communities that reached stabilized occupancy in the prior year; Lease-up communities, which includes communities that are under development, rehabilitation and in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year; Acquired communities, which include communities acquired in the current or prior year, and Held for sale and sold communities, which include apartment and mixed-use communities classified as held for sale or sold. Its operating divisions include Post Apartment Management, Post Construction and Property Services, Post Investment Group and Post Corporate Services.

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