Head to Head Analysis: Altisource Residential (RESI) & American Campus Communities (ACC)

Altisource Residential (NYSE: RESI) and American Campus Communities (NYSE:ACC) are both financials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for Altisource Residential and American Campus Communities, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altisource Residential 0 3 4 0 2.57
American Campus Communities 0 5 8 0 2.62

Altisource Residential presently has a consensus target price of $15.57, suggesting a potential upside of 40.16%. American Campus Communities has a consensus target price of $52.22, suggesting a potential upside of 22.96%. Given Altisource Residential’s higher probable upside, analysts plainly believe Altisource Residential is more favorable than American Campus Communities.

Volatility & Risk

Altisource Residential has a beta of 1.96, indicating that its share price is 96% more volatile than the S&P 500. Comparatively, American Campus Communities has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.

Dividends

Altisource Residential pays an annual dividend of $0.60 per share and has a dividend yield of 5.4%. American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 4.1%. Altisource Residential pays out -15.4% of its earnings in the form of a dividend. American Campus Communities pays out 429.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Altisource Residential has increased its dividend for 3 consecutive years and American Campus Communities has increased its dividend for 4 consecutive years. Altisource Residential is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Altisource Residential and American Campus Communities’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Altisource Residential $56.76 million 10.46 -$228.02 million ($3.90) -2.85
American Campus Communities $786.36 million 7.37 $99.06 million $0.41 103.59

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

Institutional & Insider Ownership

70.3% of Altisource Residential shares are held by institutional investors. 0.5% of Altisource Residential shares are held by insiders. Comparatively, 0.7% of American Campus Communities shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Altisource Residential and American Campus Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altisource Residential -266.58% -21.64% -8.15%
American Campus Communities 7.16% 1.58% 0.89%

Summary

American Campus Communities beats Altisource Residential on 10 of the 16 factors compared between the two stocks.

Altisource Residential Company Profile

Altisource Residential Corporation is a real estate investment trust (REIT). The Company focuses on acquiring, owning and managing single-family rental (SFR) properties throughout the United States. The Company conducts its activities through its subsidiary, Altisource Residential, L.P., and its subsidiaries. The Company also converts a portion of the real estate owned (REO) properties that it acquires through resolution of its mortgage loans into SFR properties. The Company has also entered into property management service agreements with two third-party property managers: Altisource Portfolio Solutions, SA (ASPS) and Main Street Renewal, LLC (MSR), to provide, among other things, leasing and lease management, operations, maintenance, repair and property management services in respect of its SFR portfolios. As of December 31, 2016, the Company had 10,533 properties, consisting of 9,939 properties held for use and 594 held for sale.

American Campus Communities Company Profile

American Campus Communities, Inc. is a self-managed and self-administered equity real estate investment trust (REIT). The Company’s segments include Wholly-Owned Properties, On-Campus Participating Properties, Development Services, and Property Management Services. It is engaged in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. The Wholly-Owned Properties segment consists of off-campus properties, which are located in close proximity to the school campus. The On-Campus Participating Properties segment includes on-campus properties that are operated under long-term ground/facility leases with three university systems. The Development Services segment consists of development and construction management services that it provides through one of its taxable REIT subsidiaries for third-party owners. The Property Management Services segment includes revenues generated from third-party management contracts.

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