Critical Comparison: Apartment Income REIT (NYSE:AIRC) and Extra Space Storage (NYSE:EXR)

Apartment Income REIT (NYSE:AIRCGet Rating) and Extra Space Storage (NYSE:EXRGet Rating) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

99.1% of Apartment Income REIT shares are held by institutional investors. Comparatively, 95.1% of Extra Space Storage shares are held by institutional investors. 1.1% of Apartment Income REIT shares are held by insiders. Comparatively, 1.5% of Extra Space Storage shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Apartment Income REIT and Extra Space Storage, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apartment Income REIT 2 3 2 0 2.00
Extra Space Storage 1 2 7 0 2.60

Apartment Income REIT presently has a consensus target price of $48.57, suggesting a potential upside of 17.86%. Extra Space Storage has a consensus target price of $206.09, suggesting a potential upside of 11.89%. Given Apartment Income REIT’s higher probable upside, analysts clearly believe Apartment Income REIT is more favorable than Extra Space Storage.

Profitability

This table compares Apartment Income REIT and Extra Space Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apartment Income REIT 127.20% 47.81% 14.92%
Extra Space Storage 51.63% 24.31% 8.68%

Volatility and Risk

Apartment Income REIT has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Extra Space Storage has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Dividends

Apartment Income REIT pays an annual dividend of $1.80 per share and has a dividend yield of 4.4%. Extra Space Storage pays an annual dividend of $6.00 per share and has a dividend yield of 3.3%. Apartment Income REIT pays out 29.6% of its earnings in the form of a dividend. Extra Space Storage pays out 90.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extra Space Storage has increased its dividend for 12 consecutive years. Apartment Income REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Apartment Income REIT and Extra Space Storage’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apartment Income REIT $740.85 million 8.58 $447.62 million $6.08 6.78
Extra Space Storage $1.58 billion 15.64 $827.65 million $6.64 27.74

Extra Space Storage has higher revenue and earnings than Apartment Income REIT. Apartment Income REIT is trading at a lower price-to-earnings ratio than Extra Space Storage, indicating that it is currently the more affordable of the two stocks.

Summary

Extra Space Storage beats Apartment Income REIT on 9 of the 17 factors compared between the two stocks.

About Apartment Income REIT

(Get Rating)

AIR is a real estate investment trust focused on the ownership and management of quality apartment communities located in the largest markets in the United States. AIR is one of the country's largest owners and operators of apartments, with 99 communities in 12 states and the District of Columbia. AIR common shares are traded on the New York Stock Exchange under the ticker symbol AIRC, and are included in the S&P 400. For more information about AIR, please visit our website at www.aircommunities.com.

About Extra Space Storage

(Get Rating)

Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of September 30, 2020, the Company owned and/or operated 1,906 self-storage stores in 40 states, Washington, D.C. and Puerto Rico. The Company's stores comprise approximately 1.4 million units and approximately 147.5 million square feet of rentable space. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. The Company is the second largest owner and/or operator of self-storage stores in the United States and is the largest self-storage management company in the United States.

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