Reviewing American Residential Properties (ARPI) and Sun Communities (SUI)

American Residential Properties (NYSE: ARPI) and Sun Communities (NYSE:SUI) are both financials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Dividends

American Residential Properties pays an annual dividend of $0.40 per share. Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.1%. American Residential Properties pays out -28.6% of its earnings in the form of a dividend. 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.

Profitability

This table compares American Residential Properties and Sun Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Residential Properties -38.70% -9.17% -3.64%
Sun Communities 7.37% 2.76% 1.17%

Analyst Recommendations

This is a summary of recent ratings for American Residential Properties and Sun Communities, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Residential Properties 0 0 0 0 N/A
Sun Communities 0 1 5 0 2.83

Sun Communities has a consensus target price of $92.00, suggesting a potential upside of 7.88%.

Insider & Institutional Ownership

93.7% of Sun Communities shares are held by institutional investors. 4.2% of Sun Communities shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares American Residential Properties and Sun Communities’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Residential Properties N/A N/A N/A ($1.40) N/A
Sun Communities $833.78 million 8.11 $31.32 million $0.74 115.24

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

Summary

Sun Communities beats American Residential Properties on 10 of the 11 factors compared between the two stocks.

About American Residential Properties

American Residential Properties, Inc. is an internally managed real estate investment company, which is organized as a real estate investment trust. The Company acquires, owns, renovates, and manages single-family homes as rental properties. American Residential Properties OP, L.P. acts as its operating partnership. American Residential Leasing Company, LLC is a wholly owned subsidiary of its operating partnership. The Company owns 8,893 properties in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Nevada, North Carolina, Ohio, South Carolina, Tennessee and Texas that were 81% leased, and it managed an additional 437 properties for ARP Phoenix Fund I, LP in Arizona and Nevada. In addition to its primary business, the Company has a private mortgage financing business.

About Sun Communities

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.

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