Contrasting AvalonBay Communities (AVB) and New Senior Investment Group (SNR)

AvalonBay Communities (NYSE: AVB) and New Senior Investment Group (NYSE:SNR) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Earnings & Valuation

This table compares AvalonBay Communities and New Senior Investment Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AvalonBay Communities $2.16 billion 10.49 $1.03 billion $6.36 25.78
New Senior Investment Group $472.44 million 1.30 -$72.24 million ($0.29) -25.83

AvalonBay Communities has higher revenue and earnings than New Senior Investment Group. New Senior Investment Group is trading at a lower price-to-earnings ratio than AvalonBay Communities, indicating that it is currently the more affordable of the two stocks.

Dividends

AvalonBay Communities pays an annual dividend of $5.68 per share and has a dividend yield of 3.5%. New Senior Investment Group pays an annual dividend of $1.04 per share and has a dividend yield of 13.9%. AvalonBay Communities pays out 89.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New Senior Investment Group pays out -358.6% of its earnings in the form of a dividend. New Senior Investment Group has raised its dividend for 6 consecutive years. New Senior Investment Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

94.8% of AvalonBay Communities shares are owned by institutional investors. Comparatively, 67.4% of New Senior Investment Group shares are owned by institutional investors. 0.5% of AvalonBay Communities shares are owned by insiders. Comparatively, 1.0% of New Senior Investment Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares AvalonBay Communities and New Senior Investment Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AvalonBay Communities 40.62% 8.59% 4.90%
New Senior Investment Group -5.25% -4.49% -0.87%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for AvalonBay Communities and New Senior Investment Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AvalonBay Communities 1 10 9 0 2.40
New Senior Investment Group 1 2 1 0 2.00

AvalonBay Communities presently has a consensus price target of $197.38, suggesting a potential upside of 20.38%. New Senior Investment Group has a consensus price target of $9.33, suggesting a potential upside of 24.61%. Given New Senior Investment Group’s higher probable upside, analysts clearly believe New Senior Investment Group is more favorable than AvalonBay Communities.

Summary

AvalonBay Communities beats New Senior Investment Group on 11 of the 16 factors compared between the two stocks.

About AvalonBay Communities

AvalonBay Communities, Inc. is a real estate investment trust (REIT). The Company is focused on the development, redevelopment, acquisition, ownership and operation of multifamily communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. Its segments include Established Communities, Other Stabilized Communities and Development/Redevelopment Communities. As of June 30, 2017, the Company owned or held a direct or indirect ownership interest in 287 apartment communities containing 83,123 apartment homes in 10 states and the District of Columbia, of which 23 communities were under development and nine communities were under redevelopment. It operates its apartment communities under three core brands: Avalon, AVA and Eaves by Avalon. Its real estate investments consist of operating apartment communities, communities in various stages of development (Development Communities) and Development Rights.

About New Senior Investment Group

New Senior Investment Group Inc. is a real estate investment trust with a diversified portfolio of primarily private pay senior housing properties located across the United States. The Company operates through two segments: Managed Properties and Triple Net Lease Properties. As of December 31, 2016, the Company owned a diversified portfolio of 152 primarily private pay senior housing properties located across 37 states. Under its Managed Properties segment, the Company invests in senior housing properties throughout the United States and engages property managers to manage those senior housing properties. As of December 31, 2016, the Company owned 94 properties under property management agreements with the property managers. Under its Triple Net Lease Properties segment, the Company invests in senior housing and healthcare properties throughout the United States, and leases those properties to healthcare operating companies under triple net leases.

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