EastGroup Properties (NYSE:EGP) and Mid-America Apartment Communities (NYSE:MAA) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
Dividends
EastGroup Properties pays an annual dividend of $3.16 per share and has a dividend yield of 2.1%. Mid-America Apartment Communities pays an annual dividend of $4.10 per share and has a dividend yield of 2.8%. EastGroup Properties pays out 63.5% of its earnings in the form of a dividend. Mid-America Apartment Communities pays out 62.6% 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. EastGroup Properties has raised its dividend for 9 consecutive years and Mid-America Apartment Communities has raised its dividend for 1 consecutive years. Mid-America Apartment Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares EastGroup Properties and Mid-America Apartment Communities' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| EastGroup Properties | $331.39 million | 17.98 | $121.66 million | $4.98 | 29.89 |
| Mid-America Apartment Communities | $1.64 billion | 10.24 | $353.81 million | $6.55 | 22.42 |
Mid-America Apartment Communities has higher revenue and earnings than EastGroup Properties. Mid-America Apartment Communities is trading at a lower price-to-earnings ratio than EastGroup Properties, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
EastGroup Properties has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current recommendations and price targets for EastGroup Properties and Mid-America Apartment Communities, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| EastGroup Properties | 0 | 6 | 2 | 0 | 2.25 |
| Mid-America Apartment Communities | 0 | 4 | 4 | 0 | 2.50 |
EastGroup Properties currently has a consensus target price of $139.00, suggesting a potential downside of 6.61%. Mid-America Apartment Communities has a consensus target price of $134.3636, suggesting a potential downside of 8.50%. Given EastGroup Properties' higher possible upside, research analysts clearly believe EastGroup Properties is more favorable than Mid-America Apartment Communities.
Profitability
This table compares EastGroup Properties and Mid-America Apartment Communities' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| EastGroup Properties | 33.84% | 9.94% | 4.64% |
| Mid-America Apartment Communities | 19.22% | 5.63% | 3.13% |
Institutional and Insider Ownership
92.6% of EastGroup Properties shares are owned by institutional investors. Comparatively, 91.4% of Mid-America Apartment Communities shares are owned by institutional investors. 2.0% of EastGroup Properties shares are owned by company insiders. Comparatively, 1.3% of Mid-America Apartment Communities shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Summary
EastGroup Properties beats Mid-America Apartment Communities on 9 of the 17 factors compared between the two stocks.
