AvalonBay Communities (NYSE:AVB) & BRT Apartments (NYSE:BRT) Financial Analysis

AvalonBay Communities (NYSE:AVB) and BRT Apartments (NYSE:BRT) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

88.7% of AvalonBay Communities shares are owned by institutional investors. Comparatively, 28.9% of BRT Apartments shares are owned by institutional investors. 0.4% of AvalonBay Communities shares are owned by company insiders. Comparatively, 38.3% of BRT Apartments shares are owned 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.

Dividends

AvalonBay Communities pays an annual dividend of $6.60 per share and has a dividend yield of 3.9%. BRT Apartments pays an annual dividend of $1.00 per share and has a dividend yield of 5.8%. AvalonBay Communities pays out 100.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BRT Apartments pays out 1,428.6% 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 1 consecutive years and BRT Apartments has raised its dividend for 2 consecutive years. BRT Apartments is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares AvalonBay Communities and BRT Apartments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AvalonBay Communities	33.96%	8.07%	4.52%
BRT Apartments	1.50%	0.57%	0.19%

Earnings & Valuation

This table compares AvalonBay Communities and BRT Apartments’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AvalonBay Communities	$2.73 billion	8.89	$1.14 billion	$6.57	26.05
BRT Apartments	$70.53 million	4.54	$49.96 million	$0.07	246.00

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

Volatility & Risk

AvalonBay Communities has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, BRT Apartments has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for AvalonBay Communities and BRT Apartments, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AvalonBay Communities	1	8	7	0	2.38
BRT Apartments	0	0	2	0	3.00

AvalonBay Communities presently has a consensus price target of $195.82, indicating a potential upside of 14.40%. BRT Apartments has a consensus price target of $26.50, indicating a potential upside of 53.89%. Given BRT Apartments’ stronger consensus rating and higher probable upside, analysts plainly believe BRT Apartments is more favorable than AvalonBay Communities.

Summary

AvalonBay Communities beats BRT Apartments on 10 of the 17 factors compared between the two stocks.

About AvalonBay Communities

As of September 30, 2023, the Company owned or held a direct or indirect ownership interest in 296 apartment communities containing 89,240 apartment homes in 12 states and the District of Columbia, of which 17 communities were under development and one community was under redevelopment. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

About BRT Apartments

BRT is a real estate investment trust that owns, operates and, to a lesser extent, holds interests in joint ventures that own multi-family properties. As of September 30, 2023, BRT owns or has interests in 28 multi-family properties with 7,707 units in 11 states.