Colony Starwood Homes (NYSE: SFR) and Mid-America Apartment Communities (NYSE:MAA) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.
Colony Starwood Homes pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. Mid-America Apartment Communities pays an annual dividend of $3.48 per share and has a dividend yield of 3.3%. Colony Starwood Homes pays out -266.7% of its earnings in the form of a dividend. Mid-America Apartment Communities pays out 148.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mid-America Apartment Communities has raised its dividend for 6 consecutive years. Mid-America Apartment Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and recommmendations for Colony Starwood Homes and Mid-America Apartment Communities, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Colony Starwood Homes||0||5||7||0||2.58|
|Mid-America Apartment Communities||0||1||9||0||2.90|
Colony Starwood Homes presently has a consensus target price of $36.58, indicating a potential upside of 2.05%. Mid-America Apartment Communities has a consensus target price of $109.90, indicating a potential upside of 2.73%. Given Mid-America Apartment Communities’ stronger consensus rating and higher possible upside, analysts clearly believe Mid-America Apartment Communities is more favorable than Colony Starwood Homes.
Volatility and Risk
Colony Starwood Homes has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500.
Institutional and Insider Ownership
91.8% of Mid-America Apartment Communities shares are held by institutional investors. 5.0% of Colony Starwood Homes shares are held by company insiders. Comparatively, 1.3% of Mid-America Apartment Communities shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Colony Starwood Homes and Mid-America Apartment Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Colony Starwood Homes||-5.65%||-0.81%||-0.34%|
|Mid-America Apartment Communities||15.80%||4.31%||2.38%|
Valuation and Earnings
This table compares Colony Starwood Homes and Mid-America Apartment Communities’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Colony Starwood Homes||$599.75 million||6.07||$315.66 million||($0.33)||-108.64|
|Mid-America Apartment Communities||$1.35 billion||9.00||$761.51 million||$2.34||45.72|
Mid-America Apartment Communities has higher revenue and earnings than Colony Starwood Homes. Colony Starwood Homes is trading at a lower price-to-earnings ratio than Mid-America Apartment Communities, indicating that it is currently the more affordable of the two stocks.
Mid-America Apartment Communities beats Colony Starwood Homes on 13 of the 16 factors compared between the two stocks.
Colony Starwood Homes Company Profile
Starwood Waypoint Homes, formerly Colony Starwood Homes, is an internally managed real estate investment trust (REIT). The Company was formed primarily to acquire, renovate, lease and manage residential assets in select markets across the United States. It is focused on acquiring single-family rental (SFR) homes through a variety of channels, renovating these homes to the extent necessary and leasing them to qualified residents. The Company operates through two segments, which are represented by its portfolio of SFR homes and its portfolio of NPLs owned in the joint venture with Prime Asset Fund VI, LLC (Prime). The Company identifies and pursues individual home acquisition opportunities through various sources, including multiple listing services (MLS) listings, foreclosure auctions and short sales. As of December 31, 2016, its SFR portfolio consisted of 31,684 owned homes, including 31,065 rental homes and 619 homes that it does not intend to hold for the long term.
Mid-America Apartment Communities Company Profile
Mid-America Apartment Communities, Inc. is a multifamily focused, self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and develops apartment communities primarily located in the Southeast and Southwest regions of the United States. It operates through three segments: Large market same store, Secondary market same store and Non-Same Store and Other. Its Large market same store communities are communities in markets with a population of at least one million and at least 1% of the total public multifamily REIT units that it has owned. Its Secondary market same store communities are communities in markets with populations of more than one million but less than 1% of the total public multifamily REIT units or markets with populations of less than one million that it has owned. Its Non-same store communities and other includes recent acquisitions and communities in development or lease-up communities.
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