Critical Survey: Post Properties (PPS) and Clipper Realty (CLPR)

Post Properties (NYSE: PPS) and Clipper Realty (NYSE:CLPR) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Post Properties 17.36% 5.79% 3.07%
Clipper Realty -2.66% -0.74% -0.13%

Dividends

Post Properties pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 3.7%. 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. Clipper Realty pays out -190.0% of its earnings in the form of a dividend. Clipper Realty has increased its dividend for 7 consecutive years. Clipper Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Post Properties and Clipper Realty, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Post Properties 0 0 0 0 N/A
Clipper Realty 0 0 4 0 3.00

Clipper Realty has a consensus price target of $15.75, suggesting a potential upside of 55.17%. Given Clipper Realty’s higher possible upside, analysts clearly believe Clipper Realty is more favorable than Post Properties.

Institutional and Insider Ownership

94.3% of Post Properties shares are held by institutional investors. Comparatively, 57.1% of Clipper Realty shares are held by institutional investors. 2.2% of Post Properties shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Post Properties and Clipper Realty’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Post Properties N/A N/A N/A $1.43 45.47
Clipper Realty $93.00 million 1.94 -$3.73 million ($0.20) -50.75

Post Properties has higher earnings, but lower revenue than Clipper Realty. Clipper 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.

Summary

Post Properties beats Clipper Realty on 7 of the 13 factors compared between the two stocks.

Post Properties Company Profile

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.

Clipper Realty Company Profile

Clipper Realty, Inc. is a real estate investment trust, which acquires, owns, manages, operates and repositions multi-family residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn. The Company’s segments include Commercial and Residential. As of June 30, 2016, it owned two residential/retail rental properties at 50 Murray Street and 53 Park Place in the Tribeca neighborhood of Manhattan, referred to as the Tribeca House properties. As of June 30, 2016, it also owned a residential property complex in the East Flatbush neighborhood of Brooklyn consisting of 59 buildings, referred to as the Flatbush Gardens properties or complex. As of June 30, 2016, it owned two primarily commercial properties in Downtown Brooklyn (one of which included 36 residential apartment units), referred to as the 141 Livingston Street property and the 250 Livingston Street property, and also owned the Aspen property.

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