American Realty Investors (ARL) & Invitation Homes (INVH) Critical Contrast

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American Realty Investors (NYSE:ARL) and Invitation Homes (NYSE:INVH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for American Realty Investors and Invitation Homes, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Realty Investors 0 0 0 0 N/A
Invitation Homes 0 1 9 0 2.90

Invitation Homes has a consensus price target of $25.81, indicating a potential upside of 19.12%. Given Invitation Homes’ higher possible upside, analysts plainly believe Invitation Homes is more favorable than American Realty Investors.

Risk and Volatility

American Realty Investors has a beta of -0.24, suggesting that its stock price is 124% less volatile than the S&P 500. Comparatively, Invitation Homes has a beta of 0.03, suggesting that its stock price is 97% less volatile than the S&P 500.

Profitability

This table compares American Realty Investors and Invitation Homes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Realty Investors 10.65% -2.00% -0.26%
Invitation Homes -4.71% -0.56% -0.26%

Valuation and Earnings

This table compares American Realty Investors and Invitation Homes’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Realty Investors $126.22 million 2.13 -$8.43 million N/A N/A
Invitation Homes $1.05 billion 10.70 -$105.33 million $0.26 83.35

American Realty Investors has higher earnings, but lower revenue than Invitation Homes.

Insider & Institutional Ownership

1.6% of American Realty Investors shares are owned by institutional investors. 87.9% of American Realty Investors shares are owned by company insiders. Comparatively, 0.5% of Invitation Homes shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Invitation Homes pays an annual dividend of $0.44 per share and has a dividend yield of 2.0%. American Realty Investors does not pay a dividend. Invitation Homes pays out 169.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Invitation Homes beats American Realty Investors on 7 of the 12 factors compared between the two stocks.

American Realty Investors Company Profile

American Realty Investors, Inc., together with its subsidiaries, engages in the acquisition, development, and ownership of residential, hotel, and commercial real estate properties in the Southwestern, Southeastern, and Midwestern United States. The company leases apartment units to residents; leases office, industrial, and retail space to various for-profit businesses, as well as local, state, and federal agencies; and sells properties and land. As of December 31, 2017, its portfolio include 51 residential apartment communities totaling 8,427 units; 7 commercial properties, including 5 office buildings and 2 retail centers; and a golf course. The company also owns or controls 3,613 acres of improved and unimproved land. American Realty Investors, Inc. was founded in 1961 and is headquartered in Dallas, Texas.

Invitation Homes Company Profile

Invitation Homes is a leading owner and operator of single-family homes for lease, offering residents high-quality homes across America. With over 80,000 homes for lease in 17 markets across the country, Invitation Homes is meeting changing lifestyle demands by providing residents access to updated homes with features they value, such as close proximity to jobs and access to good schools. The Company's mission statement, "Together with you, we make a house a home," reflects its commitment to high-touch service that continuously enhances residents' living experiences and provides homes where individuals and families can thrive.

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