Essex Property Trust (NYSE:ESS) and Mid-America Apartment Communities (NYSE:MAA) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
Profitability
This table compares Essex Property Trust and Mid-America Apartment Communities' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Essex Property Trust | 39.89% | 9.46% | 4.57% |
| Mid-America Apartment Communities | 19.22% | 5.63% | 3.13% |
Dividends
Essex Property Trust pays an annual dividend of $8.36 per share and has a dividend yield of 3.0%. Mid-America Apartment Communities pays an annual dividend of $4.10 per share and has a dividend yield of 2.8%. Essex Property Trust pays out 62.5% 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. Essex Property Trust has increased its dividend for 27 consecutive years and Mid-America Apartment Communities has increased its dividend for 1 consecutive years. Essex Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Essex Property Trust 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 |
|---|
| Essex Property Trust | $1.46 billion | 12.61 | $439.29 million | $13.38 | 21.18 |
| Mid-America Apartment Communities | $1.64 billion | 10.24 | $353.81 million | $6.55 | 22.42 |
Essex Property Trust has higher earnings, but lower revenue than Mid-America Apartment Communities. Essex Property Trust is trading at a lower price-to-earnings ratio than Mid-America Apartment Communities, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current recommendations for Essex Property Trust and Mid-America Apartment Communities, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Essex Property Trust | 1 | 4 | 10 | 0 | 2.60 |
| Mid-America Apartment Communities | 0 | 4 | 4 | 0 | 2.50 |
Essex Property Trust presently has a consensus price target of $277.0667, suggesting a potential downside of 2.21%. Mid-America Apartment Communities has a consensus price target of $134.3636, suggesting a potential downside of 8.50%. Given Essex Property Trust's stronger consensus rating and higher probable upside, analysts plainly believe Essex Property Trust is more favorable than Mid-America Apartment Communities.
Volatility and Risk
Essex Property Trust has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.
Institutional & Insider Ownership
95.4% of Essex Property Trust shares are owned by institutional investors. Comparatively, 91.4% of Mid-America Apartment Communities shares are owned by institutional investors. 3.5% of Essex Property Trust 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 large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Essex Property Trust beats Mid-America Apartment Communities on 15 of the 17 factors compared between the two stocks.
