New Senior Investment Group (NYSE: SNR) 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 institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and price targets for New Senior Investment Group and AvalonBay Communities, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Senior Investment Group 1 2 1 0 2.00
AvalonBay Communities 1 8 9 0 2.44

New Senior Investment Group currently has a consensus target price of $9.33, indicating a potential upside of 23.95%. AvalonBay Communities has a consensus target price of $198.60, indicating a potential upside of 18.03%. Given New Senior Investment Group’s higher possible upside, analysts clearly believe New Senior Investment Group is more favorable than AvalonBay Communities.

Profitability

This table compares New Senior Investment Group and AvalonBay Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Senior Investment Group -5.25% -4.49% -0.87%
AvalonBay Communities 41.55% 8.66% 4.94%

Institutional & Insider Ownership

67.4% of New Senior Investment Group shares are held by institutional investors. Comparatively, 94.8% of AvalonBay Communities shares are held by institutional investors. 1.0% of New Senior Investment Group shares are held by insiders. Comparatively, 0.5% of AvalonBay Communities shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

New Senior Investment Group pays an annual dividend of $1.04 per share and has a dividend yield of 13.8%. AvalonBay Communities pays an annual dividend of $5.68 per share and has a dividend yield of 3.4%. New Senior Investment Group pays out -358.6% of its earnings in the form of a dividend. AvalonBay Communities pays out 88.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities has raised its dividend for 6 consecutive years. New Senior Investment Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

New Senior Investment Group has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, AvalonBay Communities has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500.

Earnings & Valuation

This table compares New Senior Investment Group and AvalonBay Communities’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Senior Investment Group $472.44 million 1.31 -$72.24 million ($0.29) -25.96
AvalonBay Communities $2.05 billion 11.36 $1.03 billion $6.40 26.29

AvalonBay Communities has higher revenue and earnings than New Senior Investment Group. New Senior Investment Group is trading at a lower price-to-earnings ratio than AvalonBay Communities, indicating that it is currently the more affordable of the two stocks.

Summary

AvalonBay Communities beats New Senior Investment Group on 12 of the 17 factors compared between the two stocks.

About New Senior Investment Group

New Senior Investment Group Inc. is a real estate investment trust with a diversified portfolio of primarily private pay senior housing properties located across the United States. The Company operates through two segments: Managed Properties and Triple Net Lease Properties. As of December 31, 2016, the Company owned a diversified portfolio of 152 primarily private pay senior housing properties located across 37 states. Under its Managed Properties segment, the Company invests in senior housing properties throughout the United States and engages property managers to manage those senior housing properties. As of December 31, 2016, the Company owned 94 properties under property management agreements with the property managers. Under its Triple Net Lease Properties segment, the Company invests in senior housing and healthcare properties throughout the United States, and leases those properties to healthcare operating companies under triple net leases.

About AvalonBay Communities

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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