Analyzing Elme Communities (NYSE:ELME) and Apartment Investment and Management (NYSE:AIV)

Apartment Investment and Management (NYSE:AIV) and Elme Communities (NYSE:ELME) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Apartment Investment and Management and Elme Communities”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apartment Investment and Management	$210.89 million	4.05	-$102.47 million	$1.72	3.45
Elme Communities	$246.96 million	1.10	-$13.10 million	($1.52)	-2.03

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

Profitability

This table compares Apartment Investment and Management and Elme Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apartment Investment and Management	125.34%	-98.07%	-7.13%
Elme Communities	-54.57%	-13.15%	-7.52%

Insider & Institutional Ownership

83.3% of Apartment Investment and Management shares are owned by institutional investors. Comparatively, 87.9% of Elme Communities shares are owned by institutional investors. 4.0% of Apartment Investment and Management shares are owned by insiders. Comparatively, 1.4% of Elme Communities shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Apartment Investment and Management has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Elme Communities has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Apartment Investment and Management and Elme Communities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apartment Investment and Management	1	0	1	0	2.00
Elme Communities	1	3	0	0	1.75

Apartment Investment and Management currently has a consensus target price of $10.00, indicating a potential upside of 68.49%. Elme Communities has a consensus target price of $18.50, indicating a potential upside of 498.71%. Given Elme Communities’ higher probable upside, analysts clearly believe Elme Communities is more favorable than Apartment Investment and Management.

Dividends

Apartment Investment and Management pays an annual dividend of $1.01 per share and has a dividend yield of 17.0%. Elme Communities pays an annual dividend of $0.72 per share and has a dividend yield of 23.3%. Apartment Investment and Management pays out 58.7% of its earnings in the form of a dividend. Elme Communities pays out -47.4% 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. Elme Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Apartment Investment and Management beats Elme Communities on 9 of the 16 factors compared between the two stocks.

About Apartment Investment and Management

Apartment Investment & Management Co. operates as a real estate investment trust that engages in the acquisition, ownership, management and redevelopment of apartment properties. The company was founded in 1975 and is headquartered in Denver, CO.

About Elme Communities

Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.