Sun Communities (NYSE: SUI) and Apartment Investment and Management (NYSE:AIV) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Volatility & Risk

Sun Communities has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, Apartment Investment and Management has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500.

Insider & Institutional Ownership

93.6% of Sun Communities shares are owned by institutional investors. 4.2% of Sun Communities shares are owned by company insiders. Comparatively, 1.2% of Apartment Investment and Management shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Sun Communities and Apartment Investment and Management’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sun Communities $833.78 million 8.30 $31.32 million $0.74 117.82
Apartment Investment and Management $995.85 million 6.40 $430.41 million $1.31 31.01

Apartment Investment and Management has higher revenue and earnings than Sun Communities. Apartment Investment and Management is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Dividends

Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.1%. Apartment Investment and Management pays an annual dividend of $1.44 per share and has a dividend yield of 3.5%. Sun Communities pays out 362.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apartment Investment and Management pays out 109.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apartment Investment and Management has increased its dividend for 7 consecutive years. Apartment Investment and Management is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Sun Communities and Apartment Investment and Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sun Communities 7.37% 2.76% 1.17%
Apartment Investment and Management 21.36% 13.81% 3.45%

Analyst Recommendations

This is a summary of current ratings for Sun Communities and Apartment Investment and Management, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sun Communities 0 2 4 0 2.67
Apartment Investment and Management 1 4 3 0 2.25

Sun Communities currently has a consensus target price of $92.00, suggesting a potential upside of 5.52%. Apartment Investment and Management has a consensus target price of $47.38, suggesting a potential upside of 16.63%. Given Apartment Investment and Management’s higher possible upside, analysts clearly believe Apartment Investment and Management is more favorable than Sun Communities.

Summary

Apartment Investment and Management beats Sun Communities on 11 of the 17 factors compared between the two stocks.

Sun Communities Company Profile

Sun Communities, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is a fully integrated real estate company, which, together with its affiliates and predecessors, has been in the business of acquiring, operating, developing, and expanding manufactured housing (MH) and recreational vehicle (RV). As of December 31, 2016, it owned and operated or had an interest in a portfolio of properties located throughout the United States and Ontario, Canada, including 226 MH communities, 87 RV communities, and 28 properties containing both MH and RV sites. The Company operates through two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, or has an interest in a portfolio, and develops MH communities and RV communities throughout the United States and is in the business of acquiring, operating, and expanding MH and RV communities.

Apartment Investment and Management Company Profile

Apartment Investment and Management Company (Aimco) is a self-administered and self-managed real estate investment trust (REIT). Aimco, through its subsidiaries, AIMCO-GP, Inc. and AIMCO-LP Trust, holds the ownership interests in the Aimco Operating Partnership. It operates through two segments: conventional real estate and affordable real estate. As of December 31, 2016, its real estate portfolio consisted of 189 apartment communities with 46,311 apartment homes. Aimco Operating Partnership conducts the Company’s business, which is focused on the ownership, management, redevelopment and limited development of apartment communities located in the coastal and job growth markets of the United States. Its Conventional segment consists of apartment communities it classifies as Conventional Same Store and Conventional Non-Same Store. Its affordable portfolio consists primarily of apartment communities that it manages that are owned through low-income housing tax credit partnerships.

Receive News & Ratings for Sun Communities Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Sun Communities and related companies with MarketBeat.com's FREE daily email newsletter.