Sun Communities (NYSE: SUI) and Home Properties (NYSE:HME) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Dividends

Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.0%. Home Properties does not pay a dividend. Sun Communities pays out 382.9% 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 6 consecutive years.

Profitability

This table compares Sun Communities and Home Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sun Communities 6.82% 2.59% 1.07%
Home Properties 18.18% 6.60% 2.87%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Sun Communities and Home Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sun Communities 0 2 4 0 2.67
Home Properties 0 0 0 0 N/A

Sun Communities presently has a consensus price target of $89.00, suggesting a potential downside of 0.25%. Given Sun Communities’ higher probable upside, equities research analysts clearly believe Sun Communities is more favorable than Home Properties.

Valuation & Earnings

This table compares Sun Communities and Home Properties’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sun Communities $936.86 million 7.52 $443.91 million $0.70 127.46
Home Properties N/A N/A N/A N/A N/A

Sun Communities has higher revenue and earnings than Home Properties.

Insider and Institutional Ownership

94.5% of Sun Communities shares are owned by institutional investors. 4.2% of Sun Communities shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Sun Communities beats Home Properties on 7 of the 11 factors compared between the two stocks.

Sun Communities Company Profile

Sun Communities, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is a fully integrated real estate company, which, together with its affiliates and predecessors, has been in the business of acquiring, operating, developing, and expanding manufactured housing (MH) and recreational vehicle (RV). As of December 31, 2016, it owned and operated or had an interest in a portfolio of properties located throughout the United States and Ontario, Canada, including 226 MH communities, 87 RV communities, and 28 properties containing both MH and RV sites. The Company operates through two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, or has an interest in a portfolio, and develops MH communities and RV communities throughout the United States and is in the business of acquiring, operating, and expanding MH and RV communities.

Home Properties Company Profile

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.

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