Associated Estates Realty (NYSE: AEC) and Colony Capital (NYSE:CLNY) are both residential reits companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

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Colony Capital pays an annual dividend of $1.60 per share. Associated Estates Realty does not pay a dividend. Colony Capital pays out 192.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Associated Estates Realty has increased its dividend for 8 consecutive years.

Profitability

This table compares Associated Estates Realty and Colony Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Associated Estates Realty 60.04% 18.10% 7.71%
Colony Capital 31.43% 3.16% 2.88%

Analyst Ratings

This is a summary of current recommendations for Associated Estates Realty and Colony Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Associated Estates Realty 0 0 0 0 N/A
Colony Capital 0 0 0 0 N/A

Institutional & Insider Ownership

94.1% of Colony Capital shares are owned by institutional investors. 17.7% of Colony Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Associated Estates Realty and Colony Capital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Associated Estates Realty N/A N/A N/A $1.20 23.96
Colony Capital N/A N/A N/A $0.83 N/A

Colony Capital is trading at a lower price-to-earnings ratio than Associated Estates Realty, indicating that it is currently the more affordable of the two stocks.

Summary

Associated Estates Realty beats Colony Capital on 6 of the 9 factors compared between the two stocks.

About Associated Estates Realty

Associated Estates Realty Corporation is a self-administered and self-managed equity real estate investment trust (REIT). The Company is engaged primarily in the ownership and operation of multifamily apartment units. It specializes in multifamily ownership, operation, acquisition, development, disposition and property management activities. Its operating portfolio consists of approximately 49 apartment communities containing around 12,734 units in eight states that are owned, either directly or indirectly, through its subsidiaries. It also owns a commercial building in Los Angeles, California containing approximately 78,800 total square feet of office and commercial space. The Company also earns revenue from rental payments from the leasing of apartment units. It owns a taxable REIT subsidiary, which performs construction management services in connection with the development of multifamily properties that it owns, including consolidated and unconsolidated joint ventures.

About Colony Capital

Colony Capital, Inc., formerly Colony Financial, Inc., is a global real estate and investment management company. The Company operates through five segments: Real Estate Equity, including Light industrial real estate assets and operating platform; Single-family residential rentals through an investment in Colony Starwood Homes and Other real estate equity investments; Real Estate Debt, which includes loan originations and acquisitions, and Investment Management, which includes investment management of the Company-sponsored funds and other investment vehicles. Through its global investment management business, it has over $18.8 billion of assets under management. Its business objective is to provide risk-adjusted returns to its investors through a diversified portfolio of direct and indirect real estate-related equity and real estate debt investments, and fee bearing management contracts on investment funds that it manages.

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