Critical Review: American Homes 4 Rent (AMH) and Ryman Hospitality Properties (RHP)

American Homes 4 Rent (NYSE:AMH) and Ryman Hospitality Properties (NYSE:RHP) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Profitability

This table compares American Homes 4 Rent and Ryman Hospitality Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Homes 4 Rent 10.70% 1.90% 1.27%
Ryman Hospitality Properties 14.11% 50.63% 7.32%

Analyst Ratings

This is a summary of recent recommendations and price targets for American Homes 4 Rent and Ryman Hospitality Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Homes 4 Rent 0 2 8 0 2.80
Ryman Hospitality Properties 0 0 5 0 3.00

American Homes 4 Rent presently has a consensus price target of $24.50, suggesting a potential upside of 19.40%. Ryman Hospitality Properties has a consensus price target of $86.40, suggesting a potential upside of 14.07%. Given American Homes 4 Rent’s higher possible upside, research analysts plainly believe American Homes 4 Rent is more favorable than Ryman Hospitality Properties.

Volatility and Risk

American Homes 4 Rent has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Ryman Hospitality Properties has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.

Insider and Institutional Ownership

88.9% of American Homes 4 Rent shares are held by institutional investors. Comparatively, 84.7% of Ryman Hospitality Properties shares are held by institutional investors. 27.8% of American Homes 4 Rent shares are held by company insiders. Comparatively, 3.2% of Ryman Hospitality Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares American Homes 4 Rent and Ryman Hospitality Properties’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Homes 4 Rent $960.40 million 6.32 $80.99 million $1.02 20.12
Ryman Hospitality Properties $1.18 billion 3.28 $176.10 million $5.56 13.62

Ryman Hospitality Properties has higher revenue and earnings than American Homes 4 Rent. Ryman Hospitality Properties is trading at a lower price-to-earnings ratio than American Homes 4 Rent, indicating that it is currently the more affordable of the two stocks.

Dividends

American Homes 4 Rent pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. Ryman Hospitality Properties pays an annual dividend of $3.40 per share and has a dividend yield of 4.5%. American Homes 4 Rent pays out 19.6% of its earnings in the form of a dividend. Ryman Hospitality Properties pays out 61.2% 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. Ryman Hospitality Properties has raised its dividend for 4 consecutive years. Ryman Hospitality Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ryman Hospitality Properties beats American Homes 4 Rent on 10 of the 17 factors compared between the two stocks.

About American Homes 4 Rent

American Homes 4 Rent (NYSE: AMH) is a leader in the single-family home rental industry and "American Homes 4 Rent" is fast becoming a nationally recognized brand for rental homes, known for high quality, good value and tenant satisfaction. We are an internally managed Maryland real estate investment trust, or REIT, focused on acquiring, renovating, leasing, and operating attractive, single-family homes as rental properties. As of June 30, 2018, we owned 52,049 single-family properties in selected submarkets in 22 states.

About Ryman Hospitality Properties

Ryman Hospitality Properties, Inc. (NYSE:RHP) is a REIT for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. The Company's owned assets include a network of four upscale, meetings-focused resorts totaling 8,114 rooms that are managed by lodging operator Marriott International, Inc. under the Gaylord Hotels brand. Other owned assets managed by Marriott International, Inc. include Gaylord Springs Golf Links, the Wildhorse Saloon, the General Jackson Showboat, The Inn at Opryland, a 303-room overflow hotel adjacent to Gaylord Opryland and AC Hotel Washington, DC at National Harbor, a 192-room hotel near Gaylord National. The Company also owns and operates media and entertainment assets, including the Grand Ole Opry (opry.com), the legendary weekly showcase of country music's finest performers for over 90 years; the Ryman Auditorium, the storied former home of the Grand Ole Opry located in downtown Nashville; 650 AM WSM, the Opry's radio home; Ole Red, a country lifestyle and entertainment brand; and Opry City Stage, the Opry's first home away from home, in Times Square.

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