Colony Starwood Homes (NYSE: SFR) and Post Properties (NYSE:PPS) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, earnings, risk, valuation and institutional ownership.
Valuation and Earnings
This table compares Colony Starwood Homes and Post Properties’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Colony Starwood Homes||$575.68 million||8.54||-$81.26 million||($0.40)||-95.75|
Post Properties has higher revenue, but lower earnings than Colony Starwood Homes. Colony Starwood Homes is trading at a lower price-to-earnings ratio than Post Properties, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
94.3% of Post Properties shares are held by institutional investors. 5.0% of Colony Starwood Homes shares are held by insiders. Comparatively, 2.2% of Post Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Colony Starwood Homes and Post Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Colony Starwood Homes||-7.41%||-1.11%||-0.48%|
Volatility & Risk
Colony Starwood Homes has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Post Properties has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500.
This is a summary of recent recommendations for Colony Starwood Homes and Post Properties, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Colony Starwood Homes||0||5||6||0||2.55|
Colony Starwood Homes currently has a consensus price target of $36.90, suggesting a potential downside of 3.66%. Given Colony Starwood Homes’ higher probable upside, equities research analysts plainly believe Colony Starwood Homes is more favorable than Post Properties.
Colony Starwood Homes pays an annual dividend of $0.88 per share and has a dividend yield of 2.3%. Post Properties pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Colony Starwood Homes pays out -220.0% of its earnings in the form of a dividend. Post Properties pays out 131.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Post Properties has raised its dividend for 6 consecutive years. Post Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Post Properties beats Colony Starwood Homes on 7 of the 13 factors compared between the two stocks.
Colony Starwood Homes Company Profile
Starwood Waypoint Homes, formerly Colony Starwood Homes, is an internally managed real estate investment trust (REIT). The Company was formed primarily to acquire, renovate, lease and manage residential assets in select markets across the United States. It is focused on acquiring single-family rental (SFR) homes through a variety of channels, renovating these homes to the extent necessary and leasing them to qualified residents. The Company operates through two segments, which are represented by its portfolio of SFR homes and its portfolio of NPLs owned in the joint venture with Prime Asset Fund VI, LLC (Prime). The Company identifies and pursues individual home acquisition opportunities through various sources, including multiple listing services (MLS) listings, foreclosure auctions and short sales. As of December 31, 2016, its SFR portfolio consisted of 31,684 owned homes, including 31,065 rental homes and 619 homes that it does not intend to hold for the long term.
Post Properties Company Profile
Post Properties, Inc. is a self-administrated and self-managed equity real estate investment trust (REIT). The Company’s segments include Fully stabilized (same store) communities, which includes apartment communities that have been stabilized for both the current and prior year; Newly stabilized communities, which includes communities that reached stabilized occupancy in the prior year; Lease-up communities, which includes communities that are under development, rehabilitation and in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year; Acquired communities, which include communities acquired in the current or prior year, and Held for sale and sold communities, which include apartment and mixed-use communities classified as held for sale or sold. Its operating divisions include Post Apartment Management, Post Construction and Property Services, Post Investment Group and Post Corporate Services.
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