AvalonBay Communities (NYSE:AVB) vs. Mid-America Apartment Communities (NYSE:MAA) Financial Survey

AvalonBay Communities (NYSE:AVB) and Mid-America Apartment Communities (NYSE:MAA) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Institutional and Insider Ownership

92.6% of AvalonBay Communities shares are held by institutional investors. Comparatively, 93.6% of Mid-America Apartment Communities shares are held by institutional investors. 0.5% of AvalonBay Communities shares are held by company insiders. Comparatively, 1.3% of Mid-America Apartment Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AvalonBay Communities	38.91%	9.70%	5.45%
Mid-America Apartment Communities	25.98%	9.35%	4.84%

Dividends

AvalonBay Communities pays an annual dividend of $7.00 per share and has a dividend yield of 3.7%. Mid-America Apartment Communities pays an annual dividend of $6.06 per share and has a dividend yield of 4.4%. AvalonBay Communities pays out 86.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mid-America Apartment Communities pays out 124.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities has increased its dividend for 3 consecutive years and Mid-America Apartment Communities has increased its dividend for 16 consecutive years. Mid-America Apartment Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for AvalonBay Communities and Mid-America Apartment Communities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AvalonBay Communities	0	12	5	0	2.29
Mid-America Apartment Communities	3	10	8	0	2.24

AvalonBay Communities currently has a consensus target price of $217.46, indicating a potential upside of 15.99%. Mid-America Apartment Communities has a consensus target price of $161.78, indicating a potential upside of 18.75%. Given Mid-America Apartment Communities’ higher probable upside, analysts plainly believe Mid-America Apartment Communities is more favorable than AvalonBay Communities.

Volatility and Risk

AvalonBay Communities has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Earnings and Valuation

This table compares AvalonBay Communities and Mid-America Apartment Communities”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AvalonBay Communities	$2.91 billion	9.16	$1.08 billion	$8.12	23.09
Mid-America Apartment Communities	$2.19 billion	7.28	$527.54 million	$4.86	28.03

AvalonBay Communities has higher revenue and earnings than Mid-America Apartment Communities. AvalonBay 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.

Summary

AvalonBay Communities beats Mid-America Apartment Communities on 10 of the 17 factors compared between the two stocks.

About AvalonBay Communities

AvalonBay Communities, Inc. is a real estate investment trust, which engages in the development, acquisition, ownership, and operation of multifamily communities. It operates through the following segments: Same Store, Other Stabilized, and Development or Redevelopment. The Same Store segment refers to the operating communities that were owned and had stabilized occupancy. The Other Stabilized segment includes all other complete communities that have stabilized occupancy. The Development or Redevelopment segment consists of communities that are under construction. The company was founded by Gilbert M. Meyer in 1978 and is headquartered in Arlington, VA.

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.