Critical Comparison: Sun Communities (NYSE:SUI) and Mid-America Apartment Communities (NYSE:MAA)

Mid-America Apartment Communities (NYSE:MAA) and Sun Communities (NYSE:SUI) are both large-cap real estate companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Profitability

This table compares Mid-America Apartment Communities and Sun Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mid-America Apartment Communities	17.43%	6.89%	3.23%
Sun Communities	-36.00%	5.02%	2.82%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Mid-America Apartment Communities and Sun Communities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mid-America Apartment Communities	2	11	8	0	2.29
Sun Communities	1	5	9	2	2.71

Mid-America Apartment Communities presently has a consensus target price of $138.06, suggesting a potential upside of 15.84%. Sun Communities has a consensus target price of $136.25, suggesting a potential upside of 13.03%. Given Mid-America Apartment Communities’ higher probable upside, research analysts plainly believe Mid-America Apartment Communities is more favorable than Sun Communities.

Dividends

Mid-America Apartment Communities pays an annual dividend of $6.12 per share and has a dividend yield of 5.1%. Sun Communities pays an annual dividend of $4.48 per share and has a dividend yield of 3.7%. Mid-America Apartment Communities pays out 185.5% 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 pays out -72.7% of its earnings in the form of a dividend. Mid-America Apartment Communities has increased its dividend for 16 consecutive years and Sun Communities has increased its dividend for 8 consecutive years. Mid-America Apartment Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Mid-America Apartment Communities has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mid-America Apartment Communities	$2.22 billion	6.21	$446.91 million	$3.30	36.11
Sun Communities	$2.31 billion	6.24	$1.37 billion	($6.16)	-19.57

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

Institutional & Insider Ownership

93.6% of Mid-America Apartment Communities shares are held by institutional investors. Comparatively, 99.6% of Sun Communities shares are held by institutional investors. 0.6% of Mid-America Apartment Communities shares are held by insiders. Comparatively, 1.6% of Sun Communities shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Sun Communities beats Mid-America Apartment Communities on 10 of the 18 factors compared between the two stocks.

About Mid-America Apartment Communities

Mid-America Apartment Communities, Inc. is a real estate investment trust, which engages in the operation, acquisition, and development of apartment communities. It operates through the Same Store and Non-Same Store segments. The Same Store Communities segment represents those apartment communities that have been owned and stabilized for at least 12 months as of the first day of the calendar year. The Non-Same Store segment includes recent acquisitions, communities in development or lease-up. The company was founded in 1994 and is headquartered in Germantown, TN.

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.