American Campus Communities (NYSE: ACC) and UMH Properties (NYSE:UMH) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Institutional & Insider Ownership

54.0% of UMH Properties shares are owned by institutional investors. 0.7% of American Campus Communities shares are owned by insiders. Comparatively, 11.6% of UMH Properties shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for American Campus Communities and UMH Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Campus Communities 0 4 6 0 2.60
UMH Properties 0 0 5 0 3.00

American Campus Communities currently has a consensus price target of $53.00, suggesting a potential upside of 10.51%. UMH Properties has a consensus price target of $18.88, suggesting a potential upside of 24.18%. Given UMH Properties’ stronger consensus rating and higher possible upside, analysts plainly believe UMH Properties is more favorable than American Campus Communities.

Earnings & Valuation

This table compares American Campus Communities and UMH Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Campus Communities $772.33 million 8.47 $379.78 million $0.49 97.88
UMH Properties $105.77 million 4.87 $41.90 million ($0.09) -168.87

American Campus Communities has higher revenue and earnings than UMH Properties. UMH Properties is trading at a lower price-to-earnings ratio than American Campus Communities, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

American Campus Communities has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, UMH Properties has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Profitability

This table compares American Campus Communities and UMH Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Campus Communities 8.59% 1.90% 1.09%
UMH Properties 1.02% 0.76% 0.15%

Dividends

American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 3.7%. UMH Properties pays an annual dividend of $0.72 per share and has a dividend yield of 4.7%. American Campus Communities pays out 359.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UMH Properties pays out -799.9% of its earnings in the form of a dividend. American Campus Communities has raised its dividend for 4 consecutive years. UMH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

American Campus Communities beats UMH Properties on 9 of the 17 factors compared between the two stocks.

About American Campus Communities

American Campus Communities, Inc. is a self-managed and self-administered equity real estate investment trust (REIT). The Company’s segments include Wholly-Owned Properties, On-Campus Participating Properties, Development Services, and Property Management Services. It is engaged in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. The Wholly-Owned Properties segment consists of off-campus properties, which are located in close proximity to the school campus. The On-Campus Participating Properties segment includes on-campus properties that are operated under long-term ground/facility leases with three university systems. The Development Services segment consists of development and construction management services that it provides through one of its taxable REIT subsidiaries for third-party owners. The Property Management Services segment includes revenues generated from third-party management contracts.

About UMH Properties

UMH Properties, Inc. (UMH) is a real estate investment trust (REIT). The Company’s primary business is the ownership and operation of manufactured home communities, including leasing manufactured home sites to private manufactured home owners. The Company also leases homes to residents, and through its taxable REIT subsidiary, UMH Sales and Finance, Inc. (S&F), conducts manufactured home sales in its communities. As of May 31, 2017, the Company owned 107 manufactured home communities consisting of approximately 19,400 developed sites. The communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. In connection with the operation of its communities, UMH also leases homes to prospective tenants. As of December 31, 2016, UMH owned a total of 4,700 rental homes, representing approximately 26% of its developed sites. These rental homes are owned by the Company and rented to residents.

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