Apartment Investment and Management (AIV) versus Mid-America Apartment Communities (MAA) Critical Survey

Apartment Investment and Management (NYSE: AIV) and Mid-America Apartment Communities (NYSE:MAA) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitabiliy, earnings, dividends and institutional ownership.

Institutional & Insider Ownership

98.3% of Apartment Investment and Management shares are held by institutional investors. Comparatively, 92.3% of Mid-America Apartment Communities shares are held by institutional investors. 1.2% of Apartment Investment and Management shares are held by insiders. Comparatively, 1.3% of Mid-America Apartment Communities shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Apartment Investment and Management and Mid-America Apartment Communities, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apartment Investment and Management 2 3 2 0 2.00
Mid-America Apartment Communities 0 1 10 0 2.91

Apartment Investment and Management presently has a consensus price target of $46.43, suggesting a potential upside of 1.51%. Mid-America Apartment Communities has a consensus price target of $108.80, suggesting a potential upside of 4.13%. Given Mid-America Apartment Communities’ stronger consensus rating and higher possible upside, analysts plainly believe Mid-America Apartment Communities is more favorable than Apartment Investment and Management.

Profitability

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

Net Margins Return on Equity Return on Assets
Apartment Investment and Management 20.64% 12.46% 3.29%
Mid-America Apartment Communities 15.80% 4.31% 2.38%

Volatility & Risk

Apartment Investment and Management has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Dividends

Apartment Investment and Management pays an annual dividend of $1.44 per share and has a dividend yield of 3.1%. Mid-America Apartment Communities pays an annual dividend of $3.48 per share and has a dividend yield of 3.3%. Apartment Investment and Management pays out 113.4% 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 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. Apartment Investment and Management has increased its dividend for 6 consecutive years and Mid-America Apartment Communities has increased its dividend for 6 consecutive years.

Valuation & Earnings

This table compares Apartment Investment and Management 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
Apartment Investment and Management $980.21 million 7.29 $576.30 million $1.27 36.02
Mid-America Apartment Communities $1.35 billion 8.79 $761.51 million $2.34 44.65

Mid-America Apartment Communities has higher revenue and earnings than Apartment Investment and Management. Apartment Investment and Management 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 Apartment Investment and Management on 9 of the 16 factors compared between the two stocks.

Apartment Investment and Management Company Profile

Apartment Investment and Management Company (Aimco) is a self-administered and self-managed real estate investment trust (REIT). Aimco, through its subsidiaries, AIMCO-GP, Inc. and AIMCO-LP Trust, holds the ownership interests in the Aimco Operating Partnership. It operates through two segments: conventional real estate and affordable real estate. As of December 31, 2016, its real estate portfolio consisted of 189 apartment communities with 46,311 apartment homes. Aimco Operating Partnership conducts the Company’s business, which is focused on the ownership, management, redevelopment and limited development of apartment communities located in the coastal and job growth markets of the United States. Its Conventional segment consists of apartment communities it classifies as Conventional Same Store and Conventional Non-Same Store. Its affordable portfolio consists primarily of apartment communities that it manages that are owned through low-income housing tax credit partnerships.

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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