Easterly Government Properties (NYSE:DEA) and Preferred Apartment Communities (NYSE:APTS) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.
Profitability
This table compares Easterly Government Properties and Preferred Apartment Communities' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Easterly Government Properties | 4.60% | 0.89% | 0.48% |
Preferred Apartment Communities | -38.91% | -11.10% | -4.11% |
Risk and Volatility
Easterly Government Properties has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Preferred Apartment Communities has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.
Dividends
Easterly Government Properties pays an annual dividend of $1.04 per share and has a dividend yield of 4.8%. Preferred Apartment Communities pays an annual dividend of $0.70 per share and has a dividend yield of 7.6%. Easterly Government Properties pays out 86.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Preferred Apartment Communities pays out 51.1% of its earnings in the form of a dividend. Easterly Government Properties has increased its dividend for 1 consecutive years and Preferred Apartment Communities has increased its dividend for 1 consecutive years. Preferred Apartment Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Easterly Government Properties and Preferred Apartment Communities' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Easterly Government Properties | $221.72 million | 7.96 | $7.21 million | $1.20 | 17.91 |
Preferred Apartment Communities | $470.43 million | 0.97 | $-7,240,000.00 | $1.37 | 6.71 |
Easterly Government Properties has higher earnings, but lower revenue than Preferred Apartment Communities. Preferred Apartment Communities is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
95.9% of Easterly Government Properties shares are owned by institutional investors. Comparatively, 54.1% of Preferred Apartment Communities shares are owned by institutional investors. 9.9% of Easterly Government Properties shares are owned by company insiders. Comparatively, 2.4% of Preferred Apartment Communities shares are owned 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 current recommendations for Easterly Government Properties and Preferred Apartment Communities, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Easterly Government Properties | 0 | 3 | 5 | 0 | 2.63 |
Preferred Apartment Communities | 0 | 2 | 1 | 0 | 2.33 |
Easterly Government Properties presently has a consensus price target of $25.5714, suggesting a potential upside of 18.99%. Preferred Apartment Communities has a consensus price target of $9.00, suggesting a potential downside of 2.07%. Given Easterly Government Properties' stronger consensus rating and higher probable upside, analysts plainly believe Easterly Government Properties is more favorable than Preferred Apartment Communities.
Summary
Easterly Government Properties beats Preferred Apartment Communities on 11 of the 16 factors compared between the two stocks.