Preferred Apartment Communities (NYSE: APTS) is one of 42 public companies in the “Residential REITs” industry, but how does it compare to its peers? We will compare Preferred Apartment Communities to related companies based on the strength of its profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.
Risk and Volatility
Preferred Apartment Communities has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Preferred Apartment Communities’ peers have a beta of 0.51, meaning that their average share price is 49% less volatile than the S&P 500.
This table compares Preferred Apartment Communities and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Preferred Apartment Communities||10.49%||2.78%||1.08%|
|Preferred Apartment Communities Competitors||20.47%||4.10%||1.59%|
Institutional & Insider Ownership
52.5% of Preferred Apartment Communities shares are owned by institutional investors. Comparatively, 74.3% of shares of all “Residential REITs” companies are owned by institutional investors. 3.1% of Preferred Apartment Communities shares are owned by company insiders. Comparatively, 10.1% of shares of all “Residential REITs” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Preferred Apartment Communities and its peers revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Preferred Apartment Communities||$200.12 million||-$9.53 million||-20.86|
|Preferred Apartment Communities Competitors||$673.41 million||$325.74 million||16.97|
Preferred Apartment Communities’ peers have higher revenue and earnings than Preferred Apartment Communities. Preferred Apartment Communities is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Preferred Apartment Communities pays an annual dividend of $0.94 per share and has a dividend yield of 4.5%. Preferred Apartment Communities pays out -93.1% of its earnings in the form of a dividend. As a group, “Residential REITs” companies pay a dividend yield of 3.5% and pay out 149.9% of their earnings in the form of a dividend. Preferred Apartment Communities is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.
This is a summary of current ratings and price targets for Preferred Apartment Communities and its peers, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Preferred Apartment Communities||0||2||2||0||2.50|
|Preferred Apartment Communities Competitors||187||1233||1259||32||2.42|
Preferred Apartment Communities presently has a consensus price target of $19.75, suggesting a potential downside of 6.26%. As a group, “Residential REITs” companies have a potential upside of 8.21%. Given Preferred Apartment Communities’ peers higher probable upside, analysts clearly believe Preferred Apartment Communities has less favorable growth aspects than its peers.
Preferred Apartment Communities peers beat Preferred Apartment Communities on 11 of the 15 factors compared.
About Preferred Apartment Communities
Preferred Apartment Communities, Inc. is a real estate investment trust (REIT). The Company is formed to acquire and operate multifamily properties in select targeted markets throughout the United States. It operates through segments, including multifamily communities, real estate related financing, new market properties and office buildings. The multifamily communities segment consists of its portfolio of owned residential multifamily communities. The real estate related financing segment consists of the Company’s portfolio of real estate loans, bridge loans, and other instruments deployed by it to partially finance the development, construction, and prestabilization carrying costs of new multifamily communities and other real estate and real estate related assets. The new market properties segment consists of its portfolio of grocery-anchored shopping centers. The office buildings segment consists of its office buildings located in Atlanta, Georgia and Birmingham, Alabama and Texas.
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