AvalonBay Communities (NYSE:AVB) versus Invitation Home (NYSE:INVH) Financial Comparison

AvalonBay Communities (NYSE:AVB) and Invitation Home (NYSE:INVH) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Valuation and Earnings

This table compares AvalonBay Communities and Invitation Home”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AvalonBay Communities	$3.04 billion	7.97	$1.05 billion	$8.19	21.26
Invitation Home	$2.73 billion	5.98	$587.92 million	$0.96	28.34

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

Volatility and Risk

AvalonBay Communities has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Invitation Home has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Dividends

AvalonBay Communities pays an annual dividend of $7.12 per share and has a dividend yield of 4.1%. Invitation Home pays an annual dividend of $1.20 per share and has a dividend yield of 4.4%. AvalonBay Communities pays out 86.9% 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 125.0% 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 raised its dividend for 3 consecutive years and Invitation Home has raised its dividend for 1 consecutive years.

Insider & Institutional Ownership

92.6% of AvalonBay Communities shares are held by institutional investors. Comparatively, 96.8% of Invitation Home shares are held by institutional investors. 0.5% of AvalonBay Communities shares are held by insiders. Comparatively, 0.3% of Invitation Home shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for AvalonBay Communities and Invitation Home, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AvalonBay Communities	0	13	4	0	2.24
Invitation Home	0	9	9	0	2.50

AvalonBay Communities presently has a consensus price target of $197.13, indicating a potential upside of 13.22%. Invitation Home has a consensus price target of $32.94, indicating a potential upside of 21.09%. Given Invitation Home’s stronger consensus rating and higher probable upside, analysts plainly believe Invitation Home is more favorable than AvalonBay Communities.

Profitability

This table compares AvalonBay Communities and Invitation Home’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AvalonBay Communities	34.57%	8.78%	4.84%
Invitation Home	21.53%	6.24%	3.23%

Summary

AvalonBay Communities beats Invitation Home 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 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.