Financial Comparison: Sun Communities (NYSE:SUI) and Equity Residential (NYSE:EQR)

Sun Communities (NYSE:SUI) and Equity Residential (NYSE:EQR) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Analyst Recommendations

This is a breakdown of current ratings for Sun Communities and Equity Residential, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sun Communities	1	7	6	0	2.36
Equity Residential	0	12	7	0	2.37

Sun Communities presently has a consensus target price of $137.46, indicating a potential upside of 7.95%. Equity Residential has a consensus target price of $70.01, indicating a potential upside of 12.35%. Given Equity Residential’s stronger consensus rating and higher probable upside, analysts plainly believe Equity Residential is more favorable than Sun Communities.

Dividends

Sun Communities pays an annual dividend of $4.16 per share and has a dividend yield of 3.3%. Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.4%. Sun Communities pays out 52.1% of its earnings in the form of a dividend. Equity Residential pays out 91.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities has increased its dividend for 8 consecutive years and Equity Residential has increased its dividend for 4 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sun Communities	42.58%	-4.53%	-2.29%
Equity Residential	37.58%	10.30%	5.54%

Valuation & Earnings

This table compares Sun Communities and Equity Residential”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sun Communities	$3.22 billion	4.89	$101.80 million	$7.98	15.96
Equity Residential	$2.98 billion	7.96	$1.04 billion	$3.03	20.57

Equity Residential has lower revenue, but higher earnings than Sun Communities. Sun Communities is trading at a lower price-to-earnings ratio than Equity Residential, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

99.6% of Sun Communities shares are owned by institutional investors. Comparatively, 92.7% of Equity Residential shares are owned by institutional investors. 1.8% of Sun Communities shares are owned by company insiders. Comparatively, 1.1% of Equity Residential shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Sun Communities has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Summary

Equity Residential beats Sun Communities on 9 of the 17 factors compared between the two stocks.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 305 properties consisting of 80,683 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.