Reviewing American Homes 4 Rent (NYSE:AMH) and Office Properties Income Trust (NASDAQ:OPI)

Office Properties Income Trust (NASDAQ:OPI) and American Homes 4 Rent (NYSE:AMH) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Office Properties Income Trust and American Homes 4 Rent’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Office Properties Income Trust	-62.99%	-25.56%	-8.02%
American Homes 4 Rent	23.72%	5.60%	3.29%

Risk & Volatility

Office Properties Income Trust has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500. Comparatively, American Homes 4 Rent has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Institutional and Insider Ownership

64.4% of Office Properties Income Trust shares are held by institutional investors. Comparatively, 91.9% of American Homes 4 Rent shares are held by institutional investors. 1.8% of Office Properties Income Trust shares are held by insiders. Comparatively, 6.3% of American Homes 4 Rent 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Office Properties Income Trust and American Homes 4 Rent, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Office Properties Income Trust	0	0	0	0	0.00
American Homes 4 Rent	0	6	7	0	2.54

American Homes 4 Rent has a consensus target price of $41.00, suggesting a potential upside of 15.28%. Given American Homes 4 Rent’s stronger consensus rating and higher possible upside, analysts clearly believe American Homes 4 Rent is more favorable than Office Properties Income Trust.

Valuation and Earnings

This table compares Office Properties Income Trust and American Homes 4 Rent”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Office Properties Income Trust	$501.98 million	0.03	-$136.11 million	($4.90)	-0.04
American Homes 4 Rent	$1.73 billion	7.63	$412.43 million	$1.11	32.04

American Homes 4 Rent has higher revenue and earnings than Office Properties Income Trust. Office Properties Income Trust is trading at a lower price-to-earnings ratio than American Homes 4 Rent, indicating that it is currently the more affordable of the two stocks.

Dividends

Office Properties Income Trust pays an annual dividend of $0.04 per share and has a dividend yield of 18.2%. American Homes 4 Rent pays an annual dividend of $1.20 per share and has a dividend yield of 3.4%. Office Properties Income Trust pays out -0.8% of its earnings in the form of a dividend. American Homes 4 Rent pays out 108.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Homes 4 Rent has raised its dividend for 5 consecutive years. Office Properties Income Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

American Homes 4 Rent beats Office Properties Income Trust on 14 of the 17 factors compared between the two stocks.

About Office Properties Income Trust

Office Properties Income Trust is a real estate investment trust. It owns, operates, and leases office buildings to single tenants and multi-tenant buildings. The company was founded on February 17, 2009 and is headquartered in Newton, MA.

About American Homes 4 Rent

American Homes 4 Rent operates as a real estate investment trust. It engages in the acquisition, renovation, leasing, and operating of single-family homes as rental properties. The company was founded by Bradley Wayne Hughes, Sr. on October 19, 2012 and is headquartered in Las Vegas, NV.