Reviewing American Tower (NYSE:AMT) and Douglas Emmett (NYSE:DEI)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Tower	26.81%	27.79%	4.57%
Douglas Emmett	-2.59%	-0.74%	-0.28%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Tower	$10.64 billion	7.30	$2.53 billion	$6.19	26.93
Douglas Emmett	$1.00 billion	2.02	$16.27 million	($0.17)	-71.26

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

Dividends

American Tower pays an annual dividend of $7.16 per share and has a dividend yield of 4.3%. Douglas Emmett pays an annual dividend of $0.76 per share and has a dividend yield of 6.3%. American Tower pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett pays out -447.1% of its earnings in the form of a dividend. American Tower has increased its dividend for 1 consecutive years. Douglas Emmett is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for American Tower and Douglas Emmett, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Tower	0	4	16	1	2.86
Douglas Emmett	1	7	1	0	2.00

American Tower currently has a consensus target price of $215.57, indicating a potential upside of 29.33%. Douglas Emmett has a consensus target price of $13.57, indicating a potential upside of 12.02%. Given American Tower’s stronger consensus rating and higher possible upside, equities research analysts clearly believe American Tower is more favorable than Douglas Emmett.

Volatility and Risk

American Tower has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Institutional & Insider Ownership

92.7% of American Tower shares are held by institutional investors. Comparatively, 97.4% of Douglas Emmett shares are held by institutional investors. 0.1% of American Tower shares are held by company insiders. Comparatively, 13.0% of Douglas Emmett shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

American Tower beats Douglas Emmett on 13 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 Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.