Essex Property Trust (NYSE: ESS) and Apartment Investment and Management (NYSE:AIV) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Profitability

This table compares Essex Property Trust and Apartment Investment and Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Essex Property Trust 38.33% 8.03% 4.11%
Apartment Investment and Management 20.64% 12.46% 3.29%

Risk and Volatility

Essex Property Trust has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Apartment Investment and Management has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Essex Property Trust and Apartment Investment and Management, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essex Property Trust 2 9 6 0 2.24
Apartment Investment and Management 2 3 2 0 2.00

Essex Property Trust presently has a consensus target price of $265.92, suggesting a potential downside of 0.25%. Apartment Investment and Management has a consensus target price of $46.43, suggesting a potential downside of 0.05%. Given Apartment Investment and Management’s higher probable upside, analysts clearly believe Apartment Investment and Management is more favorable than Essex Property Trust.

Insider and Institutional Ownership

99.6% of Essex Property Trust shares are owned by institutional investors. Comparatively, 98.4% of Apartment Investment and Management shares are owned by institutional investors. 3.3% of Essex Property Trust shares are owned by company insiders. Comparatively, 1.2% of Apartment Investment and Management shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Essex Property Trust pays an annual dividend of $7.00 per share and has a dividend yield of 2.6%. Apartment Investment and Management pays an annual dividend of $1.44 per share and has a dividend yield of 3.1%. Essex Property Trust pays out 90.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apartment Investment and Management pays out 113.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Essex Property Trust has raised its dividend for 23 consecutive years and Apartment Investment and Management has raised its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Essex Property Trust and Apartment Investment and Management’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Essex Property Trust $1.37 billion 12.84 $932.45 million $7.78 34.26
Apartment Investment and Management $980.21 million 7.44 $576.30 million $1.27 36.58

Essex Property Trust has higher revenue and earnings than Apartment Investment and Management. Essex Property Trust is trading at a lower price-to-earnings ratio than Apartment Investment and Management, indicating that it is currently the more affordable of the two stocks.

Summary

Essex Property Trust beats Apartment Investment and Management on 14 of the 17 factors compared between the two stocks.

About Essex Property Trust

Essex Property Trust, Inc. is a self-administered and self-managed real estate investment trust. The Company is engaged primarily in the ownership, operation, management, acquisition, development and redevelopment of predominantly apartment communities, located along the West Coast. Its segments include Southern California, Northern California, Seattle Metro and Other real estate assets. The Company owns all of its interest in its real estate and other investments directly or indirectly through Essex Portfolio, L.P. (the Operating Partnership). Its properties include Mio, Form 15, Emerson Valley Village and Ashton Sherman Village. As of December 31, 2016, it owned or held an interest in 245 communities, aggregating 59,645 apartment homes, excluding its ownership in preferred equity investments, as well as two operating commercial buildings (totaling approximately 140,564 square feet), and six active development projects with 2,223 apartment homes in various stages of development.

About Apartment Investment and Management

Apartment Investment and Management Company (Aimco) is a self-administered and self-managed real estate investment trust (REIT). Aimco, through its subsidiaries, AIMCO-GP, Inc. and AIMCO-LP Trust, holds the ownership interests in the Aimco Operating Partnership. It operates through two segments: conventional real estate and affordable real estate. As of December 31, 2016, its real estate portfolio consisted of 189 apartment communities with 46,311 apartment homes. Aimco Operating Partnership conducts the Company’s business, which is focused on the ownership, management, redevelopment and limited development of apartment communities located in the coastal and job growth markets of the United States. Its Conventional segment consists of apartment communities it classifies as Conventional Same Store and Conventional Non-Same Store. Its affordable portfolio consists primarily of apartment communities that it manages that are owned through low-income housing tax credit partnerships.

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