Mid-America Apartment Communities (NYSE:MAA) and Sun Communities (NYSE:SUI) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.
Dividends
Mid-America Apartment Communities pays an annual dividend of $4.10 per share and has a dividend yield of 3.0%. Sun Communities pays an annual dividend of $3.16 per share and has a dividend yield of 2.1%. Mid-America Apartment Communities pays out 62.6% of its earnings in the form of a dividend. Sun Communities pays out 64.2% 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. Mid-America Apartment Communities has increased its dividend for 1 consecutive years and Sun Communities has increased its dividend for 4 consecutive years. Mid-America Apartment Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Mid-America Apartment Communities and Sun Communities' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Mid-America Apartment Communities | $1.64 billion | 9.39 | $353.81 million | $6.55 | 20.57 |
| Sun Communities | $1.26 billion | 12.94 | $177.38 million | $4.92 | 30.88 |
Mid-America Apartment Communities has higher revenue and earnings than Sun Communities. Mid-America Apartment Communities is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Mid-America Apartment Communities has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings for Mid-America Apartment Communities and Sun Communities, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Mid-America Apartment Communities | 0 | 4 | 4 | 0 | 2.50 |
| Sun Communities | 0 | 2 | 7 | 0 | 2.78 |
Mid-America Apartment Communities currently has a consensus target price of $129.7273, indicating a potential downside of 3.71%. Sun Communities has a consensus target price of $155.00, indicating a potential upside of 2.01%. Given Sun Communities' stronger consensus rating and higher possible upside, analysts clearly believe Sun Communities is more favorable than Mid-America Apartment Communities.
Institutional & Insider Ownership
91.4% of Mid-America Apartment Communities shares are owned by institutional investors. Comparatively, 86.0% of Sun Communities shares are owned by institutional investors. 1.3% of Mid-America Apartment Communities shares are owned by insiders. Comparatively, 2.7% of Sun Communities shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Mid-America Apartment Communities and Sun Communities' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Mid-America Apartment Communities | 19.22% | 5.63% | 3.13% |
| Sun Communities | 11.76% | 4.26% | 2.16% |
Summary
Mid-America Apartment Communities beats Sun Communities on 10 of the 17 factors compared between the two stocks.
