Altisource Residential Corporation (NYSE: RESI) and UMH Properties (NYSE:UMH) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Institutional and Insider Ownership

73.5% of Altisource Residential Corporation shares are owned by institutional investors. Comparatively, 54.0% of UMH Properties shares are owned by institutional investors. 0.5% of Altisource Residential Corporation shares are owned by insiders. Comparatively, 11.6% of UMH Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Altisource Residential Corporation has a beta of 1.98, indicating that its stock price is 98% more volatile than the S&P 500. Comparatively, UMH Properties has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Altisource Residential Corporation and UMH Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altisource Residential Corporation 0 4 4 0 2.50
UMH Properties 0 0 5 0 3.00

Altisource Residential Corporation presently has a consensus target price of $15.57, suggesting a potential upside of 39.53%. UMH Properties has a consensus target price of $18.88, suggesting a potential upside of 22.09%. Given Altisource Residential Corporation’s higher possible upside, research analysts plainly believe Altisource Residential Corporation is more favorable than UMH Properties.

Profitability

This table compares Altisource Residential Corporation and UMH Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altisource Residential Corporation -378.17% -21.82% -8.37%
UMH Properties 1.02% 0.76% 0.15%

Dividends

Altisource Residential Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 5.4%. UMH Properties pays an annual dividend of $0.72 per share and has a dividend yield of 4.7%. Altisource Residential Corporation pays out -14.4% of its earnings in the form of a dividend. UMH Properties pays out -799.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Altisource Residential Corporation has increased its dividend for 3 consecutive years. Altisource Residential Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Altisource Residential Corporation and UMH Properties’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Altisource Residential Corporation $59.21 million 10.06 -$88.76 million ($4.16) -2.68
UMH Properties $105.77 million 4.95 $41.90 million ($0.09) -171.76

UMH Properties has higher revenue and earnings than Altisource Residential Corporation. UMH Properties is trading at a lower price-to-earnings ratio than Altisource Residential Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

UMH Properties beats Altisource Residential Corporation on 10 of the 16 factors compared between the two stocks.

About Altisource Residential Corporation

Altisource Residential Corporation is a real estate investment trust (REIT). The Company focuses on acquiring, owning and managing single-family rental (SFR) properties throughout the United States. The Company conducts its activities through its subsidiary, Altisource Residential, L.P., and its subsidiaries. The Company also converts a portion of the real estate owned (REO) properties that it acquires through resolution of its mortgage loans into SFR properties. The Company has also entered into property management service agreements with two third-party property managers: Altisource Portfolio Solutions, SA (ASPS) and Main Street Renewal, LLC (MSR), to provide, among other things, leasing and lease management, operations, maintenance, repair and property management services in respect of its SFR portfolios. As of December 31, 2016, the Company had 10,533 properties, consisting of 9,939 properties held for use and 594 held for sale.

About UMH Properties

UMH Properties, Inc. (UMH) is a real estate investment trust (REIT). The Company’s primary business is the ownership and operation of manufactured home communities, including leasing manufactured home sites to private manufactured home owners. The Company also leases homes to residents, and through its taxable REIT subsidiary, UMH Sales and Finance, Inc. (S&F), conducts manufactured home sales in its communities. As of May 31, 2017, the Company owned 107 manufactured home communities consisting of approximately 19,400 developed sites. The communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. In connection with the operation of its communities, UMH also leases homes to prospective tenants. As of December 31, 2016, UMH owned a total of 4,700 rental homes, representing approximately 26% of its developed sites. These rental homes are owned by the Company and rented to residents.

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