Home Properties (HME) versus Its Competitors Critical Analysis

Home Properties (NYSE: HME) is one of 42 public companies in the “Residential REITs” industry, but how does it compare to its competitors? We will compare Home Properties to similar businesses based on the strength of its institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Profitability

This table compares Home Properties and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Home Properties 18.18% 6.60% 2.87%
Home Properties Competitors 20.37% 4.09% 1.58%

Institutional and Insider Ownership

73.2% of shares of all “Residential REITs” companies are held by institutional investors. 10.4% of shares of all “Residential REITs” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Home Properties and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Home Properties N/A N/A 32.43
Home Properties Competitors $673.89 million $325.00 million 28.32

Home Properties’ competitors have higher revenue and earnings than Home Properties. Home Properties is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Home Properties and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Home Properties 0 0 0 0 N/A
Home Properties Competitors 202 1261 1295 34 2.42

As a group, “Residential REITs” companies have a potential upside of 7.87%. Given Home Properties’ competitors higher possible upside, analysts plainly believe Home Properties has less favorable growth aspects than its competitors.

Summary

Home Properties competitors beat Home Properties on 5 of the 8 factors compared.

About Home Properties

Home Properties, Inc. (Home Properties) is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and repositions apartment communities in suburbs of metropolitan areas, primarily along the East Coast of the United States. The Company conducts its business through Home Properties, L.P. (the Operating Partnership), and a management company, Home Properties Resident Services, Inc. (HPRS). As of December 31, 2014, the Company owned and operated 121 communities with 42,107 apartment units. The Company’s properties are two- and three-story garden style apartment buildings in landscaped settings and brick or other masonry construction. As of December 31, 2014, approximately 26.6%, 24.9%, 14.0%, 8.5% and 8.5% of the Company’s Properties are located in the Washington, D.C., Baltimore, Philadelphia, Long Island and Northern New Jersey markets, respectively.

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