Critical Review: New Senior Investment Group (SNR) vs. American Homes 4 Rent (AMH)

New Senior Investment Group (NYSE: SNR) and American Homes 4 Rent (NYSE:AMH) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Earnings and Valuation

This table compares New Senior Investment Group and American Homes 4 Rent’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Senior Investment Group $472.44 million 1.33 -$72.24 million ($0.29) -26.41
American Homes 4 Rent $878.89 million 6.78 $6.69 million $0.01 2,079.00

American Homes 4 Rent has higher revenue and earnings than New Senior Investment Group. New Senior Investment Group 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

New Senior Investment Group pays an annual dividend of $1.04 per share and has a dividend yield of 13.6%. American Homes 4 Rent pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. New Senior Investment Group pays out -358.6% of its earnings in the form of a dividend. American Homes 4 Rent pays out 2,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New Senior Investment Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares New Senior Investment Group and American Homes 4 Rent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Senior Investment Group -5.25% -4.49% -0.87%
American Homes 4 Rent 6.56% 1.15% 0.75%

Risk & Volatility

New Senior Investment Group has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, American Homes 4 Rent has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for New Senior Investment Group and American Homes 4 Rent, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Senior Investment Group 1 2 1 0 2.00
American Homes 4 Rent 0 1 8 0 2.89

New Senior Investment Group presently has a consensus target price of $9.33, suggesting a potential upside of 21.85%. American Homes 4 Rent has a consensus target price of $25.22, suggesting a potential upside of 21.32%. Given New Senior Investment Group’s higher possible upside, analysts plainly believe New Senior Investment Group is more favorable than American Homes 4 Rent.

Insider and Institutional Ownership

67.4% of New Senior Investment Group shares are held by institutional investors. Comparatively, 88.2% of American Homes 4 Rent shares are held by institutional investors. 1.0% of New Senior Investment Group shares are held by company insiders. Comparatively, 27.8% of American Homes 4 Rent shares 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.

Summary

American Homes 4 Rent beats New Senior Investment Group on 12 of the 16 factors compared between the two stocks.

About New Senior Investment Group

New Senior Investment Group Inc. is a real estate investment trust with a diversified portfolio of primarily private pay senior housing properties located across the United States. The Company operates through two segments: Managed Properties and Triple Net Lease Properties. As of December 31, 2016, the Company owned a diversified portfolio of 152 primarily private pay senior housing properties located across 37 states. Under its Managed Properties segment, the Company invests in senior housing properties throughout the United States and engages property managers to manage those senior housing properties. As of December 31, 2016, the Company owned 94 properties under property management agreements with the property managers. Under its Triple Net Lease Properties segment, the Company invests in senior housing and healthcare properties throughout the United States, and leases those properties to healthcare operating companies under triple net leases.

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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