CubeSmart (NYSE:CUBE) vs. American Tower (NYSE:AMT) Financial Contrast

American Tower (NYSE:AMT) and CubeSmart (NYSE:CUBE) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.

Profitability

This table compares American Tower and CubeSmart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Tower	10.05%	22.01%	3.55%
CubeSmart	37.79%	14.33%	6.48%

Risk and Volatility

American Tower has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, CubeSmart has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Insider and Institutional Ownership

92.7% of American Tower shares are owned by institutional investors. Comparatively, 97.6% of CubeSmart shares are owned by institutional investors. 0.2% of American Tower shares are owned by insiders. Comparatively, 1.7% of CubeSmart shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

American Tower pays an annual dividend of $6.80 per share and has a dividend yield of 3.2%. CubeSmart pays an annual dividend of $2.08 per share and has a dividend yield of 4.8%. American Tower pays out 174.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart pays out 123.1% 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 Tower has increased its dividend for 1 consecutive years and CubeSmart has increased its dividend for 16 consecutive years. CubeSmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares American Tower and CubeSmart”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Tower	$10.18 billion	9.85	$1.48 billion	$3.89	55.04
CubeSmart	$1.08 billion	9.15	$410.76 million	$1.69	25.60

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

Analyst Recommendations

This is a summary of current recommendations and price targets for American Tower and CubeSmart, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Tower	0	1	14	3	3.11
CubeSmart	0	8	6	0	2.43

American Tower presently has a consensus price target of $240.25, indicating a potential upside of 12.20%. CubeSmart has a consensus price target of $47.36, indicating a potential upside of 9.45%. Given American Tower’s stronger consensus rating and higher probable upside, analysts plainly believe American Tower is more favorable than CubeSmart.

Summary

American Tower beats CubeSmart on 10 of the 18 factors compared between the two stocks.

About American Tower

American Tower, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.