Financial Analysis: Camden Property Trust (CPT) and American Residential Properties (ARPI)

American Residential Properties (NYSE: ARPI) and Camden Property Trust (NYSE:CPT) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Dividends

American Residential Properties pays an annual dividend of $0.40 per share. Camden Property Trust pays an annual dividend of $3.00 per share and has a dividend yield of 3.5%. American Residential Properties pays out -28.6% of its earnings in the form of a dividend. Camden Property Trust pays out 182.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Residential Properties has raised its dividend for 7 consecutive years.

Profitability

This table compares American Residential Properties and Camden Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Residential Properties -38.70% -9.17% -3.64%
Camden Property Trust 16.81% 4.71% 2.50%

Earnings & Valuation

This table compares American Residential Properties and Camden Property Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Residential Properties N/A N/A N/A ($1.40) N/A
Camden Property Trust $876.45 million 8.97 $819.82 million $1.64 51.71

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for American Residential Properties and Camden Property Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Residential Properties 0 0 0 0 N/A
Camden Property Trust 0 5 9 0 2.64

Camden Property Trust has a consensus price target of $94.21, suggesting a potential upside of 11.09%.

Institutional & Insider Ownership

97.0% of Camden Property Trust shares are held by institutional investors. 4.7% of Camden Property Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Camden Property Trust beats American Residential Properties on 10 of the 12 factors compared between the two stocks.

About American Residential Properties

American Residential Properties, Inc. is an internally managed real estate investment company, which is organized as a real estate investment trust. The Company acquires, owns, renovates, and manages single-family homes as rental properties. American Residential Properties OP, L.P. acts as its operating partnership. American Residential Leasing Company, LLC is a wholly owned subsidiary of its operating partnership. The Company owns 8,893 properties in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Nevada, North Carolina, Ohio, South Carolina, Tennessee and Texas that were 81% leased, and it managed an additional 437 properties for ARP Phoenix Fund I, LP in Arizona and Nevada. In addition to its primary business, the Company has a private mortgage financing business.

About Camden Property Trust

Camden Property Trust is a real estate investment trust (REIT). The Company is engaged in the ownership, management, development, redevelopment, acquisition and construction of multifamily apartment communities. As of December 31, 2016, the Company owned interests in, operated, or were developing 159 multifamily properties, which consisted of 55,366 apartment homes across the United States. The Company also owns land holdings, which it may develop into multifamily communities. The Company’s properties consist of mid-rise buildings or two and three story buildings in a landscaped setting and provide residents with a range of amenities common to multifamily rental properties. The 152 operating properties in which the Company owned interests and operated, as of December 31, 2016, averaged 953 square feet of living area per apartment home. As of December 31, 2016, 137 of its operating properties had over 200 apartment homes.

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