Clipper Realty (NYSE: CLPR) and AvalonBay Communities (NYSE:AVB) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.
Institutional and Insider Ownership
57.4% of Clipper Realty shares are held by institutional investors. Comparatively, 95.8% of AvalonBay Communities shares are held by institutional investors. 0.5% of AvalonBay Communities shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of recent ratings and recommmendations for Clipper Realty and AvalonBay Communities, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Clipper Realty currently has a consensus price target of $15.75, indicating a potential upside of 76.57%. AvalonBay Communities has a consensus price target of $194.13, indicating a potential upside of 24.38%. Given Clipper Realty’s stronger consensus rating and higher probable upside, research analysts clearly believe Clipper Realty is more favorable than AvalonBay Communities.
This table compares Clipper Realty and AvalonBay Communities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 4.3%. AvalonBay Communities pays an annual dividend of $5.68 per share and has a dividend yield of 3.6%. Clipper Realty pays out -190.0% of its earnings in the form of a dividend. AvalonBay Communities pays out 89.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Clipper Realty has increased its dividend for 6 consecutive years. Clipper Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Clipper Realty and AvalonBay Communities’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Clipper Realty||$93.00 million||1.71||-$3.73 million||($0.20)||-44.60|
|AvalonBay Communities||$2.16 billion||9.99||$876.92 million||$6.33||24.66|
AvalonBay Communities has higher revenue and earnings than Clipper Realty. Clipper Realty is trading at a lower price-to-earnings ratio than AvalonBay Communities, indicating that it is currently the more affordable of the two stocks.
AvalonBay Communities beats Clipper Realty on 11 of the 16 factors compared between the two stocks.
Clipper Realty Company Profile
Clipper Realty, Inc. is a real estate investment trust, which acquires, owns, manages, operates and repositions multi-family residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn. The Company’s segments include Commercial and Residential. As of June 30, 2016, it owned two residential/retail rental properties at 50 Murray Street and 53 Park Place in the Tribeca neighborhood of Manhattan, referred to as the Tribeca House properties. As of June 30, 2016, it also owned a residential property complex in the East Flatbush neighborhood of Brooklyn consisting of 59 buildings, referred to as the Flatbush Gardens properties or complex. As of June 30, 2016, it owned two primarily commercial properties in Downtown Brooklyn (one of which included 36 residential apartment units), referred to as the 141 Livingston Street property and the 250 Livingston Street property, and also owned the Aspen property.
AvalonBay Communities Company Profile
AvalonBay Communities, Inc. is a real estate investment trust (REIT). The Company is focused on the development, redevelopment, acquisition, ownership and operation of multifamily communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. Its segments include Established Communities, Other Stabilized Communities and Development/Redevelopment Communities. As of June 30, 2017, the Company owned or held a direct or indirect ownership interest in 287 apartment communities containing 83,123 apartment homes in 10 states and the District of Columbia, of which 23 communities were under development and nine communities were under redevelopment. It operates its apartment communities under three core brands: Avalon, AVA and Eaves by Avalon. Its real estate investments consist of operating apartment communities, communities in various stages of development (Development Communities) and Development Rights.
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