Colony Capital (NYSE:CLNY) and American Homes 4 Rent (AMH) Head to Head Contrast

Colony Capital (NYSE: CLNY) and American Homes 4 Rent (NYSE:AMH) are both financials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Dividends

Colony Capital pays an annual dividend of $1.60 per share. American Homes 4 Rent pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. Colony Capital pays out 192.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Homes 4 Rent pays out -2,000.0% of its earnings in the form of a dividend. Colony Capital has raised its dividend for 8 consecutive years. American Homes 4 Rent is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

94.1% of Colony Capital shares are owned by institutional investors. Comparatively, 88.2% of American Homes 4 Rent shares are owned by institutional investors. 17.7% of Colony Capital shares are owned by insiders. Comparatively, 27.8% of American Homes 4 Rent shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Colony Capital and American Homes 4 Rent’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Colony Capital N/A N/A N/A $0.83 N/A
American Homes 4 Rent $878.89 million 6.68 $6.69 million ($0.01) -2,046.00

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

Analyst Recommendations

This is a summary of current recommendations for Colony Capital and American Homes 4 Rent, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Colony Capital 0 0 0 0 N/A
American Homes 4 Rent 0 1 8 0 2.89

American Homes 4 Rent has a consensus price target of $25.22, suggesting a potential upside of 23.28%.

Profitability

This table compares Colony Capital and American Homes 4 Rent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Colony Capital 31.43% 3.16% 2.88%
American Homes 4 Rent 6.56% 1.15% 0.75%

Summary

Colony Capital beats American Homes 4 Rent on 7 of the 12 factors compared between the two stocks.

About Colony Capital

Colony Capital, Inc., formerly Colony Financial, Inc., is a global real estate and investment management company. The Company operates through five segments: Real Estate Equity, including Light industrial real estate assets and operating platform; Single-family residential rentals through an investment in Colony Starwood Homes and Other real estate equity investments; Real Estate Debt, which includes loan originations and acquisitions, and Investment Management, which includes investment management of the Company-sponsored funds and other investment vehicles. Through its global investment management business, it has over $18.8 billion of assets under management. Its business objective is to provide risk-adjusted returns to its investors through a diversified portfolio of direct and indirect real estate-related equity and real estate debt investments, and fee bearing management contracts on investment funds that it manages.

About American Homes 4 Rent

American Homes 4 Rent is an internally managed real estate investment trust (REIT) focused on acquiring, renovating, leasing and operating single-family homes as rental properties. The Company’s primary objective is to generate attractive risk-adjusted returns for its shareholders through dividends and capital appreciation by acquiring, renovating, leasing and operating single-family homes as rental properties. As of December 31, 2016, it owned 48,422 single-family properties in 22 states, including 1,119 properties held for sale, and had an additional 47 properties in escrow that it intended to acquire. Its integrated operating platform offers property management, acquisitions, construction, marketing, leasing, financial and administrative functions. The Company may seek to invest in condominium units, townhouses and real estate-related debt investments. The Company is externally managed and advised by American Homes 4 Rent Advisor, LLC (the Advisor).

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