Omega Healthcare Investors (NYSE:OHI – Get Free Report) and AvalonBay Communities (NYSE:AVB – Get Free Report) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.
Dividends
Omega Healthcare Investors pays an annual dividend of $2.68 per share and has a dividend yield of 8.6%. AvalonBay Communities pays an annual dividend of $6.80 per share and has a dividend yield of 3.7%. Omega Healthcare Investors pays out 270.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities pays out 103.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities has increased its dividend for 2 consecutive years.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Omega Healthcare Investors and AvalonBay Communities, as reported by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Omega Healthcare Investors | 1 | 6 | 6 | 0 | 2.38 |
AvalonBay Communities | 0 | 8 | 8 | 0 | 2.50 |
Risk and Volatility
Omega Healthcare Investors has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, AvalonBay Communities has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.
Profitability
This table compares Omega Healthcare Investors and AvalonBay Communities’ net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Omega Healthcare Investors | 25.50% | 6.41% | 2.60% |
AvalonBay Communities | 33.56% | 7.98% | 4.51% |
Insider & Institutional Ownership
65.3% of Omega Healthcare Investors shares are owned by institutional investors. Comparatively, 92.6% of AvalonBay Communities shares are owned by institutional investors. 1.2% of Omega Healthcare Investors shares are owned by company insiders. Comparatively, 0.4% of AvalonBay Communities shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Omega Healthcare Investors and AvalonBay Communities’ top-line revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Omega Healthcare Investors | $949.74 million | 8.02 | $242.18 million | $0.99 | 31.36 |
AvalonBay Communities | $2.77 billion | 9.43 | $928.83 million | $6.55 | 28.04 |
AvalonBay Communities has higher revenue and earnings than Omega Healthcare Investors. AvalonBay Communities is trading at a lower price-to-earnings ratio than Omega Healthcare Investors, indicating that it is currently the more affordable of the two stocks.
Summary
AvalonBay Communities beats Omega Healthcare Investors on 13 of the 16 factors compared between the two stocks.
About Omega Healthcare Investors
Omega is a REIT that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the U.S., as well as in the U.K.
About AvalonBay Communities
As of December 31, 2023, the Company owned or held a direct or indirect ownership interest in 299 apartment communities containing 90,669 apartment homes in 12 states and the District of Columbia, of which 18 communities were under development. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.
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