Associated Estates Realty (NYSE: AEC) and American Campus Communities (NYSE:ACC) are both residential reits companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.

Dividends

American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 4.5%. Associated Estates Realty does not pay a dividend. American Campus Communities pays out 429.3% 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 increased its dividend for 5 consecutive years.

Profitability

This table compares Associated Estates Realty and American Campus Communities’ 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%
American Campus Communities 7.16% 1.58% 0.89%

Earnings & Valuation

This table compares Associated Estates Realty and American Campus Communities’ gross 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
American Campus Communities $786.36 million 6.76 $99.06 million $0.41 95.05

American Campus Communities has higher revenue and earnings than Associated Estates Realty. Associated Estates Realty 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Associated Estates Realty and American Campus Communities, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Associated Estates Realty 0 0 0 0 N/A
American Campus Communities 1 4 9 0 2.57

American Campus Communities has a consensus price target of $49.50, indicating a potential upside of 27.02%. Given American Campus Communities’ higher possible upside, analysts plainly believe American Campus Communities is more favorable than Associated Estates Realty.

Summary

Associated Estates Realty beats American Campus Communities on 6 of the 11 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 American Campus Communities

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.

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