Head-To-Head Survey: American Residential Properties (ARPI) & American Campus Communities (ACC)

American Residential Properties (NYSE: ARPI) and American Campus Communities (NYSE:ACC) are both residential reits companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Analyst Ratings

This is a summary of current ratings and price targets for American Residential Properties and American Campus Communities, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Residential Properties 0 0 0 0 N/A
American Campus Communities 1 5 8 0 2.50

American Campus Communities has a consensus target price of $50.00, suggesting a potential upside of 25.91%. Given American Campus Communities’ higher probable upside, analysts clearly believe American Campus Communities is more favorable than American Residential Properties.

Valuation and Earnings

This table compares American Residential Properties and American Campus Communities’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Residential Properties N/A N/A N/A ($1.40) -11.35
American Campus Communities $786.36 million 6.89 $99.06 million $0.40 99.28

American Campus Communities has higher revenue and earnings than American Residential Properties. American Residential Properties is trading at a lower price-to-earnings ratio than American Campus Communities, indicating that it is currently the more affordable of the two stocks.

Dividends

American Residential Properties pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 4.4%. American Residential Properties pays out -28.6% of its earnings in the form of a dividend. American Campus Communities pays out 440.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Campus Communities has increased its dividend for 5 consecutive years. American Campus Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares American Residential Properties and American Campus Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Residential Properties -38.70% -9.17% -3.64%
American Campus Communities 7.16% 1.58% 0.89%

Summary

American Campus Communities beats American Residential Properties on 10 of the 11 factors compared between the two stocks.

American Residential Properties Company Profile

American Residential Properties, Inc. is an internally managed real estate investment company, which is organized as a real estate investment trust. The Company acquires, owns, renovates, and manages single-family homes as rental properties. American Residential Properties OP, L.P. acts as its operating partnership. American Residential Leasing Company, LLC is a wholly owned subsidiary of its operating partnership. The Company owns 8,893 properties in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Nevada, North Carolina, Ohio, South Carolina, Tennessee and Texas that were 81% leased, and it managed an additional 437 properties for ARP Phoenix Fund I, LP in Arizona and Nevada. In addition to its primary business, the Company has a private mortgage financing business.

American Campus Communities Company Profile

American Campus Communities, Inc. is a self-managed and self-administered equity real estate investment trust (REIT). The Company’s segments include Wholly-Owned Properties, On-Campus Participating Properties, Development Services, and Property Management Services. It is engaged in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. The Wholly-Owned Properties segment consists of off-campus properties, which are located in close proximity to the school campus. The On-Campus Participating Properties segment includes on-campus properties that are operated under long-term ground/facility leases with three university systems. The Development Services segment consists of development and construction management services that it provides through one of its taxable REIT subsidiaries for third-party owners. The Property Management Services segment includes revenues generated from third-party management contracts.

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