Critical Contrast: Altisource Residential (RESI) versus Independence Realty Trust (IRT)
Altisource Residential (NYSE: RESI) and Independence Realty Trust (NYSE:IRT) are both small-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.
Altisource Residential pays an annual dividend of $0.60 per share and has a dividend yield of 5.6%. Independence Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 8.4%. Altisource Residential pays out -15.4% of its earnings in the form of a dividend. Independence Realty Trust pays out -276.9% 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. Altisource Residential has raised its dividend for 4 consecutive years. Independence Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of current recommendations for Altisource Residential and Independence Realty Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independence Realty Trust||0||1||5||0||2.83|
Altisource Residential presently has a consensus price target of $15.57, indicating a potential upside of 46.62%. Independence Realty Trust has a consensus price target of $11.20, indicating a potential upside of 30.69%. Given Altisource Residential’s higher probable upside, analysts plainly believe Altisource Residential is more favorable than Independence Realty Trust.
Institutional & Insider Ownership
70.3% of Altisource Residential shares are owned by institutional investors. Comparatively, 78.6% of Independence Realty Trust shares are owned by institutional investors. 0.5% of Altisource Residential shares are owned by company insiders. Comparatively, 0.6% of Independence Realty Trust 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.
This table compares Altisource Residential and Independence Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independence Realty Trust||-10.91%||-3.08%||-1.28%|
Risk and Volatility
Altisource Residential has a beta of 1.74, suggesting that its share price is 74% more volatile than the S&P 500. Comparatively, Independence Realty Trust has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.
Valuation & Earnings
This table compares Altisource Residential and Independence Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Altisource Residential||$56.76 million||10.00||-$228.02 million||($3.90)||-2.72|
|Independence Realty Trust||$153.36 million||4.67||-$9.80 million||($0.26)||-32.96|
Independence Realty Trust has higher revenue and earnings than Altisource Residential. Independence Realty Trust is trading at a lower price-to-earnings ratio than Altisource Residential, indicating that it is currently the more affordable of the two stocks.
Independence Realty Trust beats Altisource Residential on 12 of the 16 factors compared between the two stocks.
Altisource Residential Company Profile
Altisource Residential Corporation is a real estate investment trust (REIT). The Company focuses on acquiring, owning and managing single-family rental (SFR) properties throughout the United States. The Company conducts its activities through its subsidiary, Altisource Residential, L.P., and its subsidiaries. The Company also converts a portion of the real estate owned (REO) properties that it acquires through resolution of its mortgage loans into SFR properties. The Company has also entered into property management service agreements with two third-party property managers: Altisource Portfolio Solutions, SA (ASPS) and Main Street Renewal, LLC (MSR), to provide, among other things, leasing and lease management, operations, maintenance, repair and property management services in respect of its SFR portfolios. As of December 31, 2016, the Company had 10,533 properties, consisting of 9,939 properties held for use and 594 held for sale.
Independence Realty Trust Company Profile
Independence Realty Trust, Inc. is an internally-managed real estate investment trust (REIT). The Company is engaged in the business of owning, managing, operating, leasing, acquiring, developing, investing in, and disposing of real estate assets. The Company owns apartment properties in geographic non-gateway markets. As of September 26, 2017, the Company owns and operates 55 multifamily apartment properties, totaling 15,165 units. Its properties include Copper Mill, Crestmont, Heritage Trace, Runaway Bay, Berkshire Square, The Crossings, Reserve at Eagle Ridge, Windrush, Heritage Park, Raindance, Augusta, Invitational, Carrington Park, Walnut Hill, Lenoxplace, Bennington Pond, Jamestown, Meadows, Oxmoor, Bayview Club, Arbors River Oaks, Fox Trails, Bridge Pointe, The Aventine Greenville and Westmont Commons.
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