Head-To-Head Survey: Education Realty Trust (EDR) vs. UDR (UDR)

Education Realty Trust (NYSE: EDR) and UDR (NYSE:UDR) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and price targets for Education Realty Trust and UDR, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Education Realty Trust 2 5 6 0 2.31
UDR 1 10 3 0 2.14

Education Realty Trust presently has a consensus target price of $40.90, suggesting a potential upside of 23.01%. UDR has a consensus target price of $39.55, suggesting a potential upside of 9.94%. Given Education Realty Trust’s stronger consensus rating and higher probable upside, research analysts plainly believe Education Realty Trust is more favorable than UDR.

Profitability

This table compares Education Realty Trust and UDR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Education Realty Trust 11.33% 2.01% 1.32%
UDR 29.41% 10.18% 3.85%

Volatility and Risk

Education Realty Trust has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, UDR has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500.

Institutional and Insider Ownership

96.6% of UDR shares are held by institutional investors. 0.5% of Education Realty Trust shares are held by company insiders. Comparatively, 3.1% of UDR 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.

Earnings and Valuation

This table compares Education Realty Trust and UDR’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Education Realty Trust $288.97 million 8.72 $44.92 million $0.46 72.28
UDR $959.86 million 10.03 $292.71 million $1.06 33.93

UDR has higher revenue and earnings than Education Realty Trust. UDR is trading at a lower price-to-earnings ratio than Education Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Education Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 4.7%. UDR pays an annual dividend of $1.24 per share and has a dividend yield of 3.4%. Education Realty Trust pays out 339.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UDR pays out 117.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Education Realty Trust has raised its dividend for 8 consecutive years and UDR has raised its dividend for 7 consecutive years. Education Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

UDR beats Education Realty Trust on 10 of the 17 factors compared between the two stocks.

About Education Realty Trust

Education Realty Trust, Inc. (EdR) is a self-managed and self-advised real estate investment trust (REIT). The Trust is engaged in developing, acquiring, owning and managing collegiate housing communities located near university campuses. The Trust operates through three segments: collegiate housing leasing, development consulting services and management services. The Trust develops collegiate housing communities for its own account and also provides third-party development consulting services on collegiate housing development projects for universities and other third parties. As of December 31, 2016, the Trust owned 64 collegiate housing communities located in 22 states containing 32,729 beds in 12,294 apartment units on or near 38 university campuses. As of December 31, 2016, the Trust provided third-party management services for 22 collegiate housing communities located in 11 states containing 11,767 beds in 4,214 apartment units on or near 17 university campuses.

About UDR

UDR, Inc. is a self-administered real estate investment trust. The Company owns, operates, acquires, renovates, develops, redevelops, disposes of and manages multifamily apartment communities generally located in various markets across the United States. The Company’s segments are Same-Store Communities and Non-Mature Communities/Other. As of December 31, 2016, the Company’s consolidated real estate portfolio included 127 communities located in 18 markets, with a total of 39,454 completed apartment homes. As of December 31, 2016, the Company also had an ownership interest in 27 communities containing 6,849 apartment homes through unconsolidated joint ventures or partnerships. As of December 31, 2016, the Company’s properties were in various locations, such as Orange County, San Francisco and Los Angeles in California; Seattle, Washington; Richmond, Virginia; Baltimore, Maryland; Orlando and Tampa in Florida; Nashville, Tennessee, and Dallas and Austin in Texas.

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