Comparing Invitation Home (NYSE:INVH) and AvalonBay Communities (NYSE:AVB)

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

Dividends

AvalonBay Communities pays an annual dividend of $7.12 per share and has a dividend yield of 3.9%. Invitation Home pays an annual dividend of $1.20 per share and has a dividend yield of 4.3%. AvalonBay Communities pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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 owned by institutional investors. Comparatively, 96.8% of Invitation Home shares are owned by institutional investors. 0.5% of AvalonBay Communities shares are owned by company insiders. Comparatively, 0.3% of Invitation Home shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AvalonBay Communities	0	13	4	0	2.24
Invitation Home	0	10	9	0	2.47

AvalonBay Communities presently has a consensus target price of $197.20, indicating a potential upside of 7.03%. Invitation Home has a consensus target price of $32.78, indicating a potential upside of 16.92%. Given Invitation Home’s stronger consensus rating and higher possible 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	37.21%	9.49%	5.20%
Invitation Home	21.53%	6.24%	3.23%

Valuation & Earnings

This table compares AvalonBay Communities and Invitation Home”s gross 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	8.43	$1.05 billion	$6.23	29.57
Invitation Home	$2.73 billion	6.16	$587.92 million	$0.96	29.20

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

Summary

AvalonBay Communities beats Invitation Home on 11 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.