Home Properties (NYSE: HME) and Equity Residential (NYSE:EQR) are both financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Dividends

Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 3.0%. Home Properties does not pay a dividend. Equity Residential pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity Residential has raised its dividend for 6 consecutive years.

Institutional and Insider Ownership

91.1% of Equity Residential shares are owned by institutional investors. 3.8% of Equity Residential shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Home Properties and Equity Residential’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Home Properties 18.18% 6.60% 2.87%
Equity Residential 33.99% 7.92% 3.97%

Earnings & Valuation

This table compares Home Properties and Equity Residential’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Home Properties N/A N/A N/A N/A N/A
Equity Residential $2.43 billion 10.04 $1.57 billion $2.23 29.79

Equity Residential has higher revenue and earnings than Home Properties.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Home Properties and Equity Residential, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Home Properties 0 0 0 0 N/A
Equity Residential 1 9 2 0 2.08

Equity Residential has a consensus target price of $67.64, indicating a potential upside of 1.80%. Given Equity Residential’s higher possible upside, analysts plainly believe Equity Residential is more favorable than Home Properties.

Summary

Equity Residential beats Home Properties on 10 of the 11 factors compared between the two stocks.

About Home Properties

Home Properties, Inc. (Home Properties) is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and repositions apartment communities in suburbs of metropolitan areas, primarily along the East Coast of the United States. The Company conducts its business through Home Properties, L.P. (the Operating Partnership), and a management company, Home Properties Resident Services, Inc. (HPRS). As of December 31, 2014, the Company owned and operated 121 communities with 42,107 apartment units. The Company’s properties are two- and three-story garden style apartment buildings in landscaped settings and brick or other masonry construction. As of December 31, 2014, approximately 26.6%, 24.9%, 14.0%, 8.5% and 8.5% of the Company’s Properties are located in the Washington, D.C., Baltimore, Philadelphia, Long Island and Northern New Jersey markets, respectively.

About Equity Residential

Equity Residential is a real estate investment trust. The Company’s primary business is the acquisition, development and management of multifamily residential properties. Its segments include Boston, New York, Washington D.C., Southern California, San Francisco, Seattle and Other Markets. Southern California includes Los Angeles, San Diego and Orange County. Other Markets includes Phoenix. It is engaged in leasing of apartment units to residents. It focuses on rental apartment properties in urban and high-density suburban coastal gateway markets. As of December 31, 2016, the Company owned 302 properties located in 10 states and the District of Columbia consisting of 77,458 apartment units. The Company’s projects include The Alton, 455 Eye Street, 855 Brannan, Cascade, One Henry Adams, 340 Fremont and Vista 99. ERP Operating Limited Partnership (ERPOP) conducts the multifamily residential property business of Equity Residential.

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