Apartment Investment and Management (AIV) & Sun Communities (SUI) Head-To-Head Survey

Apartment Investment and Management (NYSE: AIV) and Sun Communities (NYSE:SUI) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Apartment Investment and Management and Sun Communities, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apartment Investment and Management 1 4 3 0 2.25
Sun Communities 0 2 4 0 2.67

Apartment Investment and Management presently has a consensus target price of $47.38, indicating a potential upside of 15.66%. Sun Communities has a consensus target price of $92.00, indicating a potential upside of 4.52%. Given Apartment Investment and Management’s higher possible upside, research analysts plainly believe Apartment Investment and Management is more favorable than Sun Communities.

Risk and Volatility

Apartment Investment and Management has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.

Earnings and Valuation

This table compares Apartment Investment and Management and Sun Communities’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apartment Investment and Management $995.85 million 6.46 $430.41 million $1.31 31.27
Sun Communities $833.78 million 8.38 $31.32 million $0.74 118.95

Apartment Investment and Management has higher revenue and earnings than Sun Communities. Apartment Investment and Management is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Apartment Investment and Management 21.36% 13.81% 3.45%
Sun Communities 7.37% 2.76% 1.17%

Dividends

Apartment Investment and Management pays an annual dividend of $1.44 per share and has a dividend yield of 3.5%. Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.0%. Apartment Investment and Management pays out 109.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities pays out 362.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities has raised its dividend for 7 consecutive years. Apartment Investment and Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

93.6% of Sun Communities shares are owned by institutional investors. 1.2% of Apartment Investment and Management shares are owned by company insiders. Comparatively, 4.2% of Sun Communities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Apartment Investment and Management beats Sun Communities on 10 of the 17 factors compared between the two stocks.

About Apartment Investment and Management

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.

About Sun Communities

Sun Communities, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is a fully integrated real estate company, which, together with its affiliates and predecessors, has been in the business of acquiring, operating, developing, and expanding manufactured housing (MH) and recreational vehicle (RV). As of December 31, 2016, it owned and operated or had an interest in a portfolio of properties located throughout the United States and Ontario, Canada, including 226 MH communities, 87 RV communities, and 28 properties containing both MH and RV sites. The Company operates through two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, or has an interest in a portfolio, and develops MH communities and RV communities throughout the United States and is in the business of acquiring, operating, and expanding MH and RV communities.

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