Independence Realty Trust (IRT) & Clipper Realty (CLPR) Financial Review

Independence Realty Trust (NYSE: IRT) and Clipper Realty (NYSE:CLPR) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Profitability

This table compares Independence Realty Trust and Clipper Realty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independence Realty Trust -10.91% -3.08% -1.28%
Clipper Realty -2.66% -0.74% -0.13%

Dividends

Independence Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 7.1%. Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 3.8%. Independence Realty Trust pays out -276.9% of its earnings in the form of a dividend. Clipper Realty pays out -190.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Independence Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Independence Realty Trust and Clipper Realty’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independence Realty Trust $153.36 million 5.51 -$9.80 million ($0.26) -38.92
Clipper Realty $93.00 million 1.90 -$3.73 million ($0.20) -49.50

Clipper Realty has lower revenue, but higher earnings than Independence Realty Trust. Clipper Realty is trading at a lower price-to-earnings ratio than Independence Realty Trust, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

78.5% of Independence Realty Trust shares are held by institutional investors. Comparatively, 57.1% of Clipper Realty shares are held by institutional investors. 0.6% of Independence Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Independence Realty Trust and Clipper Realty, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independence Realty Trust 0 1 5 0 2.83
Clipper Realty 0 0 4 0 3.00

Independence Realty Trust currently has a consensus target price of $11.20, indicating a potential upside of 10.67%. Clipper Realty has a consensus target price of $15.67, indicating a potential upside of 58.25%. Given Clipper Realty’s stronger consensus rating and higher possible upside, analysts plainly believe Clipper Realty is more favorable than Independence Realty Trust.

Summary

Independence Realty Trust beats Clipper Realty on 8 of the 15 factors compared between the two stocks.

Independence Realty Trust Company Profile

Independence Realty Trust, Inc. is an internally-managed real estate investment trust (REIT). The Company is engaged in the business of owning, managing, operating, leasing, acquiring, developing, investing in, and disposing of real estate assets. The Company owns apartment properties in geographic non-gateway markets. As of September 26, 2017, the Company owns and operates 55 multifamily apartment properties, totaling 15,165 units. Its properties include Copper Mill, Crestmont, Heritage Trace, Runaway Bay, Berkshire Square, The Crossings, Reserve at Eagle Ridge, Windrush, Heritage Park, Raindance, Augusta, Invitational, Carrington Park, Walnut Hill, Lenoxplace, Bennington Pond, Jamestown, Meadows, Oxmoor, Bayview Club, Arbors River Oaks, Fox Trails, Bridge Pointe, The Aventine Greenville and Westmont Commons.

Clipper Realty Company Profile

Clipper Realty, Inc. is a real estate investment trust, which acquires, owns, manages, operates and repositions multi-family residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn. The Company’s segments include Commercial and Residential. As of June 30, 2016, it owned two residential/retail rental properties at 50 Murray Street and 53 Park Place in the Tribeca neighborhood of Manhattan, referred to as the Tribeca House properties. As of June 30, 2016, it also owned a residential property complex in the East Flatbush neighborhood of Brooklyn consisting of 59 buildings, referred to as the Flatbush Gardens properties or complex. As of June 30, 2016, it owned two primarily commercial properties in Downtown Brooklyn (one of which included 36 residential apartment units), referred to as the 141 Livingston Street property and the 250 Livingston Street property, and also owned the Aspen property.

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