Head-To-Head Analysis: Home Properties (HME) versus Mid-America Apartment Communities (MAA)

Mid-America Apartment Communities (NYSE: MAA) and Home Properties (NYSE:HME) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Mid-America Apartment Communities and Home Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mid-America Apartment Communities 0 3 8 0 2.73
Home Properties 0 0 0 0 N/A

Mid-America Apartment Communities currently has a consensus price target of $110.60, suggesting a potential upside of 8.05%. Given Mid-America Apartment Communities’ higher probable upside, equities analysts clearly believe Mid-America Apartment Communities is more favorable than Home Properties.

Profitability

This table compares Mid-America Apartment Communities and Home Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mid-America Apartment Communities 16.73% 4.22% 2.40%
Home Properties 18.18% 6.60% 2.87%

Earnings & Valuation

This table compares Mid-America Apartment Communities and Home Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Mid-America Apartment Communities $1.13 billion 10.34 $212.22 million $2.22 46.11
Home Properties N/A N/A N/A $2.32 32.43

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

Dividends

Mid-America Apartment Communities pays an annual dividend of $3.48 per share and has a dividend yield of 3.4%. Home Properties does not pay a dividend. Mid-America Apartment Communities pays out 156.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mid-America Apartment Communities has raised its dividend for 6 consecutive years and Home Properties has raised its dividend for 6 consecutive years.

Institutional and Insider Ownership

92.3% of Mid-America Apartment Communities shares are held by institutional investors. 1.3% of Mid-America Apartment Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Mid-America Apartment Communities beats Home Properties on 6 of the 11 factors compared between the two stocks.

About Mid-America Apartment Communities

Mid-America Apartment Communities, Inc. is a multifamily focused, self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and develops apartment communities primarily located in the Southeast and Southwest regions of the United States. It operates through three segments: Large market same store, Secondary market same store and Non-Same Store and Other. Its Large market same store communities are communities in markets with a population of at least one million and at least 1% of the total public multifamily REIT units that it has owned. Its Secondary market same store communities are communities in markets with populations of more than one million but less than 1% of the total public multifamily REIT units or markets with populations of less than one million that it has owned. Its Non-same store communities and other includes recent acquisitions and communities in development or lease-up communities.

About Home Properties

Home Properties, Inc. (Home Properties) is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and repositions apartment communities in suburbs of metropolitan areas, primarily along the East Coast of the United States. The Company conducts its business through Home Properties, L.P. (the Operating Partnership), and a management company, Home Properties Resident Services, Inc. (HPRS). As of December 31, 2014, the Company owned and operated 121 communities with 42,107 apartment units. The Company’s properties are two- and three-story garden style apartment buildings in landscaped settings and brick or other masonry construction. As of December 31, 2014, approximately 26.6%, 24.9%, 14.0%, 8.5% and 8.5% of the Company’s Properties are located in the Washington, D.C., Baltimore, Philadelphia, Long Island and Northern New Jersey markets, respectively.

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