Clipper Realty (NYSE: CLPR) and Preferred Apartment Communities (NYSE:APTS) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.
Insider & Institutional Ownership
57.1% of Clipper Realty shares are held by institutional investors. Comparatively, 52.0% of Preferred Apartment Communities shares are held by institutional investors. 3.1% of Preferred Apartment Communities shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a breakdown of current ratings and recommmendations for Clipper Realty and Preferred Apartment Communities, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Preferred Apartment Communities||0||3||2||0||2.40|
Clipper Realty currently has a consensus target price of $15.75, indicating a potential upside of 55.17%. Preferred Apartment Communities has a consensus target price of $19.80, indicating a potential upside of 16.33%. Given Clipper Realty’s stronger consensus rating and higher probable upside, equities analysts clearly believe Clipper Realty is more favorable than Preferred Apartment Communities.
This table compares Clipper Realty and Preferred Apartment Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Preferred Apartment Communities||10.49%||2.78%||1.08%|
Valuation & Earnings
This table compares Clipper Realty and Preferred Apartment Communities’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Clipper Realty||$93.00 million||1.94||-$3.73 million||($0.20)||-50.75|
|Preferred Apartment Communities||$200.12 million||3.12||-$9.53 million||($1.01)||-16.85|
Clipper Realty has higher earnings, but lower revenue than Preferred Apartment Communities. Clipper Realty is trading at a lower price-to-earnings ratio than Preferred Apartment Communities, indicating that it is currently the more affordable of the two stocks.
Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 3.7%. Preferred Apartment Communities pays an annual dividend of $1.00 per share and has a dividend yield of 5.9%. Clipper Realty pays out -190.0% of its earnings in the form of a dividend. Preferred Apartment Communities pays out -99.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Preferred Apartment Communities has increased its dividend for 2 consecutive years. Preferred Apartment Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Preferred Apartment Communities beats Clipper Realty on 9 of the 16 factors compared between the two stocks.
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.
Preferred Apartment Communities Company Profile
Preferred Apartment Communities, Inc. is a real estate investment trust (REIT). The Company is formed to acquire and operate multifamily properties in select targeted markets throughout the United States. It operates through segments, including multifamily communities, real estate related financing, new market properties and office buildings. The multifamily communities segment consists of its portfolio of owned residential multifamily communities. The real estate related financing segment consists of the Company’s portfolio of real estate loans, bridge loans, and other instruments deployed by it to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. The new market properties segment consists of its portfolio of grocery-anchored shopping centers. The office buildings segment consists of its office buildings located in Atlanta, Georgia and Birmingham, Alabama and Texas.
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