Head-To-Head Review: Altisource Residential Corporation (RESI) vs. Post Properties (PPS)

Post Properties (NYSE: PPS) and Altisource Residential Corporation (NYSE:RESI) are both residential reits companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Volatility & Risk

Post Properties has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500. Comparatively, Altisource Residential Corporation has a beta of 1.96, indicating that its stock price is 96% more volatile than the S&P 500.

Insider and Institutional Ownership

94.3% of Post Properties shares are held by institutional investors. Comparatively, 72.1% of Altisource Residential Corporation shares are held by institutional investors. 2.2% of Post Properties shares are held by company insiders. Comparatively, 0.5% of Altisource Residential Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Post Properties and Altisource Residential Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Post Properties N/A N/A N/A $1.43 45.47
Altisource Residential Corporation $56.76 million 10.29 -$228.02 million ($3.90) -2.80

Post Properties has higher revenue, but lower earnings than Altisource Residential Corporation. Altisource Residential Corporation is trading at a lower price-to-earnings ratio than Post Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

Post Properties pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Altisource Residential Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 5.5%. Post Properties pays out 131.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Altisource Residential Corporation pays out -15.4% of its earnings in the form of a dividend. Post Properties has raised its dividend for 6 consecutive years and Altisource Residential Corporation has raised its dividend for 3 consecutive years. Altisource Residential Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Post Properties and Altisource Residential Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Post Properties 17.36% 5.79% 3.07%
Altisource Residential Corporation -266.58% -21.64% -8.15%

Analyst Ratings

This is a breakdown of current ratings for Post Properties and Altisource Residential Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Post Properties 0 0 0 0 N/A
Altisource Residential Corporation 0 4 4 0 2.50

Altisource Residential Corporation has a consensus target price of $15.57, indicating a potential upside of 42.47%. Given Altisource Residential Corporation’s higher probable upside, analysts plainly believe Altisource Residential Corporation is more favorable than Post Properties.

Summary

Post Properties beats Altisource Residential Corporation on 7 of the 13 factors compared between the two stocks.

Post Properties Company Profile

Post Properties, Inc. is a self-administrated and self-managed equity real estate investment trust (REIT). The Company’s segments include Fully stabilized (same store) communities, which includes apartment communities that have been stabilized for both the current and prior year; Newly stabilized communities, which includes communities that reached stabilized occupancy in the prior year; Lease-up communities, which includes communities that are under development, rehabilitation and in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year; Acquired communities, which include communities acquired in the current or prior year, and Held for sale and sold communities, which include apartment and mixed-use communities classified as held for sale or sold. Its operating divisions include Post Apartment Management, Post Construction and Property Services, Post Investment Group and Post Corporate Services.

Altisource Residential Corporation 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.

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