ARBOR RLTY TR I/SH (NYSE:ABR) and American Campus Communities (NYSE:ACC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.
Volatility and Risk
ARBOR RLTY TR I/SH has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, American Campus Communities has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.
50.4% of ARBOR RLTY TR I/SH shares are held by institutional investors. Comparatively, 98.2% of American Campus Communities shares are held by institutional investors. 14.6% of ARBOR RLTY TR I/SH shares are held by company insiders. Comparatively, 0.6% of American Campus Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a summary of current ratings for ARBOR RLTY TR I/SH and American Campus Communities, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ARBOR RLTY TR I/SH||1||1||3||0||2.40|
|American Campus Communities||0||5||5||0||2.50|
ARBOR RLTY TR I/SH currently has a consensus target price of $12.01, indicating a potential upside of 0.10%. American Campus Communities has a consensus target price of $44.50, indicating a potential downside of 2.03%. Given ARBOR RLTY TR I/SH’s higher possible upside, equities analysts clearly believe ARBOR RLTY TR I/SH is more favorable than American Campus Communities.
This table compares ARBOR RLTY TR I/SH and American Campus Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ARBOR RLTY TR I/SH||50.73%||13.78%||2.83%|
|American Campus Communities||12.60%||3.25%||1.66%|
Valuation and Earnings
This table compares ARBOR RLTY TR I/SH and American Campus Communities’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ARBOR RLTY TR I/SH||$156.18 million||5.82||$73.38 million||$1.04||11.54|
|American Campus Communities||$796.45 million||7.81||$69.03 million||$2.31||19.66|
ARBOR RLTY TR I/SH has higher earnings, but lower revenue than American Campus Communities. ARBOR RLTY TR I/SH is trading at a lower price-to-earnings ratio than American Campus Communities, indicating that it is currently the more affordable of the two stocks.
ARBOR RLTY TR I/SH pays an annual dividend of $1.08 per share and has a dividend yield of 9.0%. American Campus Communities pays an annual dividend of $1.84 per share and has a dividend yield of 4.1%. ARBOR RLTY TR I/SH pays out 103.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Campus Communities pays out 79.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ARBOR RLTY TR I/SH has raised its dividend for 7 consecutive years and American Campus Communities has raised its dividend for 6 consecutive years. ARBOR RLTY TR I/SH is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
ARBOR RLTY TR I/SH beats American Campus Communities on 9 of the 17 factors compared between the two stocks.
ARBOR RLTY TR I/SH Company Profile
Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets. It operates in two segments, Structured Business and Agency Business. The company primarily invests in real estate-related bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related notes and various mortgage-related securities. It offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower's equity in a transaction; financing by making preferred equity investments in entities that directly or indirectly own real property; and junior participation financing in the form of a junior participating interest in the senior debt. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2003 and is headquartered in Uniondale, New York.
American Campus Communities Company Profile
American Campus Communities, Inc. is the largest owner, manager and developer of high-quality student housing communities in the United States. The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management and operational management of student housing properties. As of September 30, 2018, American Campus Communities owned 168 student housing properties containing approximately 103,500 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 202 properties with approximately 131,900 beds.
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