AvalonBay Communities (NYSE:AVB – Get Free Report) and Service Properties Trust (NASDAQ:SVC – Get Free Report) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.
Valuation & Earnings
This table compares AvalonBay Communities and Service Properties Trust”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AvalonBay Communities | $2.91 billion | 10.67 | $1.08 billion | $7.59 | 28.78 |
| Service Properties Trust | $1.90 billion | 0.25 | -$32.78 million | ($1.67) | -1.74 |
AvalonBay Communities has higher revenue and earnings than Service Properties Trust. Service Properties Trust is trading at a lower price-to-earnings ratio than AvalonBay Communities, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Institutional and Insider Ownership
92.6% of AvalonBay Communities shares are owned by institutional investors. Comparatively, 77.6% of Service Properties Trust shares are owned by institutional investors. 0.4% of AvalonBay Communities shares are owned by company insiders. Comparatively, 1.4% of Service Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares AvalonBay Communities and Service Properties Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AvalonBay Communities | 37.13% | 9.15% | 5.15% |
| Service Properties Trust | -12.87% | -22.67% | -3.37% |
Analyst Ratings
This is a summary of current recommendations for AvalonBay Communities and Service Properties Trust, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AvalonBay Communities | 0 | 7 | 8 | 0 | 2.53 |
| Service Properties Trust | 1 | 0 | 1 | 0 | 2.00 |
AvalonBay Communities presently has a consensus target price of $238.64, suggesting a potential upside of 9.24%. Service Properties Trust has a consensus target price of $5.25, suggesting a potential upside of 81.03%. Given Service Properties Trust’s higher possible upside, analysts plainly believe Service Properties Trust is more favorable than AvalonBay Communities.
Dividends
AvalonBay Communities pays an annual dividend of $7.00 per share and has a dividend yield of 3.2%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.4%. AvalonBay Communities pays out 92.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Service Properties Trust pays out -2.4% of its earnings in the form of a dividend.
Summary
AvalonBay Communities beats Service Properties Trust on 12 of the 16 factors compared between the two stocks.
About AvalonBay Communities
AvalonBay Communities, Inc. is a real estate investment trust, which engages in the development, acquisition, ownership, and operation of multifamily communities. It operates through the following segments: Same Store, Other Stabilized, and Development or Redevelopment. The Same Store segment refers to the operating communities that were owned and had stabilized occupancy. The Other Stabilized segment includes all other complete communities that have stabilized occupancy. The Development or Redevelopment segment consists of communities that are under construction. The company was founded by Gilbert M. Meyer in 1978 and is headquartered in Arlington, VA.
About Service Properties Trust
Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.
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