Analyzing Sun Communities (NYSE:SUI) & American Homes 4 Rent (NYSE:AMH)

American Homes 4 Rent (NYSE:AMH) and Sun Communities (NYSE:SUI) are both large-cap real estate companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Dividends

American Homes 4 Rent pays an annual dividend of $1.32 per share and has a dividend yield of 4.0%. Sun Communities pays an annual dividend of $4.48 per share and has a dividend yield of 3.7%. American Homes 4 Rent pays out 104.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities pays out -72.7% of its earnings in the form of a dividend. American Homes 4 Rent has raised its dividend for 5 consecutive years and Sun Communities has raised its dividend for 8 consecutive years.

Profitability

This table compares American Homes 4 Rent and Sun Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Homes 4 Rent	24.17%	6.03%	3.47%
Sun Communities	-36.00%	5.02%	2.82%

Valuation and Earnings

This table compares American Homes 4 Rent and Sun Communities”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Homes 4 Rent	$1.85 billion	6.45	$452.97 million	$1.26	26.27
Sun Communities	$2.31 billion	6.32	$1.37 billion	($6.16)	-19.83

Sun Communities has higher revenue and earnings than American Homes 4 Rent. Sun Communities is trading at a lower price-to-earnings ratio than American Homes 4 Rent, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.9% of American Homes 4 Rent shares are owned by institutional investors. Comparatively, 99.6% of Sun Communities shares are owned by institutional investors. 5.7% of American Homes 4 Rent shares are owned by company insiders. Comparatively, 1.6% of Sun Communities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for American Homes 4 Rent and Sun Communities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Homes 4 Rent	0	6	10	1	2.71
Sun Communities	1	5	9	2	2.71

American Homes 4 Rent currently has a consensus target price of $35.94, suggesting a potential upside of 8.56%. Sun Communities has a consensus target price of $136.25, suggesting a potential upside of 11.52%. Given Sun Communities’ higher possible upside, analysts clearly believe Sun Communities is more favorable than American Homes 4 Rent.

Volatility & Risk

American Homes 4 Rent has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Summary

American Homes 4 Rent beats Sun Communities on 10 of the 17 factors compared between the two stocks.

About American Homes 4 Rent

American Homes 4 Rent operates as a real estate investment trust. It engages in the acquisition, renovation, leasing, and operating of single-family homes as rental properties. The company was founded by Bradley Wayne Hughes, Sr. on October 19, 2012 and is headquartered in Las Vegas, NV.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.