Comparing Silver Bay Realty Trust (SBY) and American Residential Properties (ARPI)

American Residential Properties (NYSE: ARPI) and Silver Bay Realty Trust (NYSE:SBY) are both residential reits companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Dividends

American Residential Properties pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. Silver Bay Realty Trust pays an annual dividend of $0.52 per share and has a dividend yield of 2.4%. American Residential Properties pays out -28.6% of its earnings in the form of a dividend. Silver Bay Realty Trust pays out -742.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American Residential Properties has increased its dividend for 4 consecutive years. American Residential Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares American Residential Properties and Silver Bay Realty Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Residential Properties N/A N/A N/A ($1.40) -11.35
Silver Bay Realty Trust N/A N/A N/A ($0.07) -307.00

Silver Bay Realty Trust is trading at a lower price-to-earnings ratio than American Residential Properties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Residential Properties and Silver Bay Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Residential Properties -38.70% -9.17% -3.64%
Silver Bay Realty Trust -5.71% -1.42% -0.61%

Institutional and Insider Ownership

73.6% of Silver Bay Realty Trust shares are held by institutional investors. 7.3% of Silver Bay Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for American Residential Properties and Silver Bay Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Residential Properties 0 0 0 0 N/A
Silver Bay Realty Trust 0 3 0 0 2.00

Silver Bay Realty Trust has a consensus price target of $20.25, indicating a potential downside of 5.77%. Given Silver Bay Realty Trust’s higher possible upside, analysts plainly believe Silver Bay Realty Trust is more favorable than American Residential Properties.

Summary

Silver Bay Realty Trust beats American Residential Properties on 8 of the 11 factors compared between the two stocks.

About American Residential Properties

American Residential Properties, Inc. is an internally managed real estate investment company, which is organized as a real estate investment trust. The Company acquires, owns, renovates, and manages single-family homes as rental properties. American Residential Properties OP, L.P. acts as its operating partnership. American Residential Leasing Company, LLC is a wholly owned subsidiary of its operating partnership. The Company owns 8,893 properties in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Nevada, North Carolina, Ohio, South Carolina, Tennessee and Texas that were 81% leased, and it managed an additional 437 properties for ARP Phoenix Fund I, LP in Arizona and Nevada. In addition to its primary business, the Company has a private mortgage financing business.

About Silver Bay Realty Trust

Silver Bay Realty Trust Corp. is a real estate investment trust. It focuses on the acquisition, renovation, leasing and management of single-family properties in select markets in the United States. As of December 31, 2016, it had owned 9,044 single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio, South Carolina and Texas. Its investments in real estate consist of single-family properties located in various select markets, including Atlanta, Phoenix, Tampa, Charlotte, Orlando, Dallas, Jacksonville, Northern California, Las Vegas, Columbus, Tucson and Southeast Florida. The Charlotte market includes properties in South Carolina due to its proximity to Charlotte, North Carolina. The Northern California market consists of Contra Costa, Napa and Solano counties. The Southeast Florida market consists of Miami-Dade, Broward and Palm Beach counties. It conducts business and owns all of its properties through Silver Bay Operating Partnership L.P.

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