Contrasting Mid-America Apartment Communities (NYSE:MAA) and Altisource Residential (RESI)

Altisource Residential (NYSE: RESI) and Mid-America Apartment Communities (NYSE:MAA) are both financials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Analyst Ratings

This is a summary of current ratings and recommmendations for Altisource Residential and Mid-America Apartment Communities, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altisource Residential 0 2 4 0 2.67
Mid-America Apartment Communities 0 6 6 0 2.50

Altisource Residential currently has a consensus target price of $15.67, suggesting a potential upside of 45.87%. Mid-America Apartment Communities has a consensus target price of $110.80, suggesting a potential upside of 8.02%. Given Altisource Residential’s stronger consensus rating and higher probable upside, equities analysts plainly believe Altisource Residential is more favorable than Mid-America Apartment Communities.

Profitability

This table compares Altisource Residential and Mid-America Apartment Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altisource Residential -266.58% -21.64% -8.15%
Mid-America Apartment Communities 16.73% 4.22% 2.40%

Dividends

Altisource Residential pays an annual dividend of $0.60 per share and has a dividend yield of 5.6%. Mid-America Apartment Communities pays an annual dividend of $3.48 per share and has a dividend yield of 3.4%. Altisource Residential pays out -15.4% of its earnings in the form of a dividend. Mid-America Apartment Communities pays out 156.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Altisource Residential has raised its dividend for 6 consecutive years and Mid-America Apartment Communities has raised its dividend for 3 consecutive years. Altisource Residential is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Altisource Residential has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Institutional & Insider Ownership

70.5% of Altisource Residential shares are owned by institutional investors. Comparatively, 93.0% of Mid-America Apartment Communities shares are owned by institutional investors. 0.5% of Altisource Residential shares are owned by insiders. Comparatively, 1.3% of Mid-America Apartment Communities shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Altisource Residential and Mid-America Apartment Communities’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Altisource Residential $56.76 million 10.11 -$228.02 million ($3.90) -2.75
Mid-America Apartment Communities $1.13 billion 10.36 $212.22 million $2.22 46.20

Mid-America Apartment Communities has higher revenue and earnings than Altisource Residential. Altisource Residential 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.

Summary

Mid-America Apartment Communities beats Altisource Residential on 10 of the 16 factors compared between the two stocks.

Altisource Residential Company Profile

Altisource Residential Corporation is a real estate investment trust (REIT). The Company focuses on acquiring, owning and managing single-family rental (SFR) properties throughout the United States. The Company conducts its activities through its subsidiary, Altisource Residential, L.P., and its subsidiaries. The Company also converts a portion of the real estate owned (REO) properties that it acquires through resolution of its mortgage loans into SFR properties. The Company has also entered into property management service agreements with two third-party property managers: Altisource Portfolio Solutions, SA (ASPS) and Main Street Renewal, LLC (MSR), to provide, among other things, leasing and lease management, operations, maintenance, repair and property management services in respect of its SFR portfolios. As of December 31, 2016, the Company had 10,533 properties, consisting of 9,939 properties held for use and 594 held for sale.

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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