Centerspace (NYSE:CSR) versus AvalonBay Communities (NYSE:AVB) Head-To-Head Review

Centerspace (NYSE:CSR) and AvalonBay Communities (NYSE:AVB) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Centerspace and AvalonBay Communities, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerspace	0	7	3	0	2.30
AvalonBay Communities	0	11	6	0	2.35

Centerspace presently has a consensus target price of $69.67, indicating a potential upside of 5.46%. AvalonBay Communities has a consensus target price of $206.73, indicating a potential upside of 13.80%. Given AvalonBay Communities’ stronger consensus rating and higher probable upside, analysts clearly believe AvalonBay Communities is more favorable than Centerspace.

Insider and Institutional Ownership

79.0% of Centerspace shares are held by institutional investors. Comparatively, 92.6% of AvalonBay Communities shares are held by institutional investors. 0.4% of Centerspace shares are held by insiders. Comparatively, 0.5% of AvalonBay Communities shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Centerspace pays an annual dividend of $3.08 per share and has a dividend yield of 4.7%. AvalonBay Communities pays an annual dividend of $7.00 per share and has a dividend yield of 3.9%. Centerspace pays out 172.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities pays out 85.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Centerspace has raised its dividend for 2 consecutive years and AvalonBay Communities has raised its dividend for 3 consecutive years.

Profitability

This table compares Centerspace and AvalonBay Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Centerspace	11.14%	3.52%	1.54%
AvalonBay Communities	38.78%	9.72%	5.45%

Volatility and Risk

Centerspace has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, AvalonBay Communities has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Earnings & Valuation

This table compares Centerspace and AvalonBay Communities”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerspace	$273.45 million	4.04	-$10.69 million	$1.79	36.91
AvalonBay Communities	$3.01 billion	8.54	$1.08 billion	$8.19	22.18

AvalonBay Communities has higher revenue and earnings than Centerspace. AvalonBay Communities is trading at a lower price-to-earnings ratio than Centerspace, indicating that it is currently the more affordable of the two stocks.

Summary

AvalonBay Communities beats Centerspace on 14 of the 17 factors compared between the two stocks.

About Centerspace

Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune.

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.