Invitation Home (NYSE:INVH) versus Essex Property Trust (NYSE:ESS) Critical Comparison

Invitation Home (NYSE:INVH) and Essex Property Trust (NYSE:ESS) are both large-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Institutional and Insider Ownership

96.8% of Invitation Home shares are owned by institutional investors. Comparatively, 96.5% of Essex Property Trust shares are owned by institutional investors. 0.3% of Invitation Home shares are owned by insiders. Comparatively, 3.5% of Essex Property Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Invitation Home and Essex Property Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invitation Home	$2.62 billion	6.28	$453.92 million	$0.95	28.24
Essex Property Trust	$1.86 billion	8.83	$741.52 million	$13.16	19.40

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

Risk and Volatility

Invitation Home has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Essex Property Trust has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Invitation Home and Essex Property Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Invitation Home	21.70%	6.03%	3.14%
Essex Property Trust	45.46%	14.68%	6.46%

Analyst Ratings

This is a summary of current ratings and price targets for Invitation Home and Essex Property Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invitation Home	0	9	8	0	2.47
Essex Property Trust	1	13	7	0	2.29

Invitation Home currently has a consensus target price of $34.59, suggesting a potential upside of 28.96%. Essex Property Trust has a consensus target price of $290.38, suggesting a potential upside of 13.72%. Given Invitation Home’s stronger consensus rating and higher probable upside, analysts clearly believe Invitation Home is more favorable than Essex Property Trust.

Dividends

Invitation Home pays an annual dividend of $1.16 per share and has a dividend yield of 4.3%. Essex Property Trust pays an annual dividend of $10.28 per share and has a dividend yield of 4.0%. Invitation Home pays out 122.1% 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 pays out 78.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Invitation Home has increased its dividend for 1 consecutive years and Essex Property Trust has increased its dividend for 31 consecutive years.

Summary

Essex Property Trust beats Invitation Home on 9 of the 17 factors compared between the two stocks.

About Invitation Home

Invitation Homes, an S&P 500 company, is the nation's premier single-family home leasing and management company, meeting changing lifestyle demands by providing access to high-quality, updated homes with valued features such as close proximity to jobs and access to good schools. The company's mission, Together with you, we make a house a home, reflects its commitment to providing homes where individuals and families can thrive and high-touch service that continuously enhances residents' living experiences.

About Essex Property Trust

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 252 apartment communities comprising approximately 62,000 apartment homes with an additional property in active development.