Contrasting Invitation Home (NYSE:INVH) & AvalonBay Communities (NYSE:AVB)

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Invitation Home and AvalonBay Communities, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invitation Home	0	10	8	0	2.44
AvalonBay Communities	0	13	4	0	2.24

Invitation Home currently has a consensus price target of $31.94, indicating a potential upside of 11.14%. AvalonBay Communities has a consensus price target of $197.47, indicating a potential upside of 7.25%. Given Invitation Home’s stronger consensus rating and higher probable upside, research analysts clearly believe Invitation Home is more favorable than AvalonBay Communities.

Volatility and Risk

Invitation Home has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, AvalonBay Communities has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Dividends

Invitation Home pays an annual dividend of $1.20 per share and has a dividend yield of 4.2%. AvalonBay Communities pays an annual dividend of $7.12 per share and has a dividend yield of 3.9%. Invitation Home pays out 126.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities pays out 103.2% 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 has increased its dividend for 1 consecutive years and AvalonBay Communities has increased its dividend for 3 consecutive years.

Insider & Institutional Ownership

96.8% of Invitation Home shares are held by institutional investors. Comparatively, 92.6% of AvalonBay Communities shares are held by institutional investors. 0.3% of Invitation Home shares are held by insiders. Comparatively, 0.5% of AvalonBay Communities shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Invitation Home and AvalonBay Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Invitation Home	20.88%	6.29%	3.20%
AvalonBay Communities	37.21%	9.56%	5.19%

Valuation & Earnings

This table compares Invitation Home and AvalonBay Communities”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invitation Home	$2.73 billion	6.25	$587.92 million	$0.95	30.25
AvalonBay Communities	$3.04 billion	8.42	$1.05 billion	$6.90	26.68

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

Summary

AvalonBay Communities beats Invitation Home on 10 of the 17 factors compared between the two stocks.

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.

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.