Critical Review: Independence Realty Trust (NYSE:IRT) & Centerspace (NYSE:CSR)

Centerspace (NYSE:CSR) and Independence Realty Trust (NYSE:IRT) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.

Institutional and Insider Ownership

79.0% of Centerspace shares are owned by institutional investors. Comparatively, 88.3% of Independence Realty Trust shares are owned by institutional investors. 0.4% of Centerspace shares are owned by company insiders. Comparatively, 0.6% of Independence Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Centerspace pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. Independence Realty Trust pays an annual dividend of $0.68 per share and has a dividend yield of 4.0%. Centerspace pays out 172.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Independence Realty Trust pays out 680.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Centerspace has increased its dividend for 2 consecutive years and Independence Realty Trust has increased its dividend for 3 consecutive years. Centerspace is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Centerspace has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, Independence Realty Trust has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Centerspace and Independence Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerspace	0	6	2	0	2.25
Independence Realty Trust	1	4	8	0	2.54

Centerspace currently has a consensus target price of $69.86, indicating a potential upside of 9.05%. Independence Realty Trust has a consensus target price of $21.35, indicating a potential upside of 26.82%. Given Independence Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Independence Realty Trust is more favorable than Centerspace.

Profitability

This table compares Centerspace and Independence Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Centerspace	11.14%	3.52%	1.54%
Independence Realty Trust	3.42%	0.62%	0.37%

Valuation & Earnings

This table compares Centerspace and Independence Realty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerspace	$260.98 million	4.10	-$10.69 million	$1.79	35.79
Independence Realty Trust	$651.53 million	6.18	$39.29 million	$0.10	168.35

Independence Realty Trust has higher revenue and earnings than Centerspace. Centerspace is trading at a lower price-to-earnings ratio than Independence Realty Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Independence Realty Trust beats Centerspace on 11 of the 17 factors compared between the two stocks.

About Centerspace

Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune.

About Independence Realty Trust

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.