American Homes 4 Rent (NYSE:AMH) & Invitation Home (NYSE:INVH) Head-To-Head Review

American Homes 4 Rent (NYSE:AMH) and Invitation Home (NYSE:INVH) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for American Homes 4 Rent and Invitation Home, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Homes 4 Rent	0	7	8	0	2.53
Invitation Home	0	9	9	0	2.50

American Homes 4 Rent currently has a consensus price target of $38.14, indicating a potential upside of 18.83%. Invitation Home has a consensus price target of $34.91, indicating a potential upside of 24.48%. Given Invitation Home’s higher possible upside, analysts plainly believe Invitation Home is more favorable than American Homes 4 Rent.

Earnings and Valuation

This table compares American Homes 4 Rent and Invitation Home”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Homes 4 Rent	$1.73 billion	6.89	$412.43 million	$1.18	27.20
Invitation Home	$2.62 billion	6.56	$453.92 million	$0.95	29.52

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

Profitability

This table compares American Homes 4 Rent and Invitation Home’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Homes 4 Rent	24.70%	5.90%	3.46%
Invitation Home	21.70%	6.03%	3.14%

Volatility and Risk

American Homes 4 Rent has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Invitation Home has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Insider and Institutional Ownership

91.9% of American Homes 4 Rent shares are held by institutional investors. Comparatively, 96.8% of Invitation Home shares are held by institutional investors. 6.0% of American Homes 4 Rent shares are held by insiders. Comparatively, 0.3% of Invitation Home shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

American Homes 4 Rent pays an annual dividend of $1.20 per share and has a dividend yield of 3.7%. Invitation Home pays an annual dividend of $1.16 per share and has a dividend yield of 4.1%. American Homes 4 Rent pays out 101.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Invitation Home pays out 122.1% 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 increased its dividend for 5 consecutive years and Invitation Home has increased its dividend for 1 consecutive years.

Summary

Invitation Home beats American Homes 4 Rent on 9 of the 17 factors compared between the two stocks.

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.

About Invitation Home

Invitation Homes, an S&P 500 company, is the nation's premier single-family home leasing and management company, meeting changing lifestyle demands by providing access to high-quality, updated homes with valued features such as close proximity to jobs and access to good schools. The company's mission, Together with you, we make a house a home, reflects its commitment to providing homes where individuals and families can thrive and high-touch service that continuously enhances residents' living experiences.