Sun Communities (SUI) vs. Silver Bay Realty Trust (SBY) Critical Contrast

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                Silver Bay Realty Trust (NYSE: SBY) and Sun Communities (NYSE:SUI) are both financials companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability. 

Profitability

This table compares Silver Bay Realty Trust and Sun Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silver Bay Realty Trust -5.71% -1.42% -0.61%
Sun Communities 8.01% 2.98% 1.29%
             <strong>Dividends</strong>

Silver Bay Realty Trust pays an annual dividend of $0.52 per share. Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.0%. Silver Bay Realty Trust pays out -742.9% of its earnings in the form of a dividend. Sun Communities pays out 315.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities has raised its dividend for 4 consecutive years. Sun Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Silver Bay Realty Trust and Sun Communities, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silver Bay Realty Trust 0 0 0 0 N/A
Sun Communities 0 0 5 0 3.00

Sun Communities has a consensus price target of $93.40, indicating a potential upside of 5.11%.

Institutional and Insider Ownership

73.6% of Silver Bay Realty Trust shares are held by institutional investors. Comparatively, 94.8% of Sun Communities shares are held by institutional investors. 7.3% of Silver Bay Realty Trust shares are held by company insiders. Comparatively, 4.2% of Sun Communities shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Silver Bay Realty Trust and Sun Communities’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Silver Bay Realty Trust N/A N/A N/A ($0.07) N/A
Sun Communities $982.57 million 7.22 $81.81 million $0.85 104.54

Sun Communities has higher revenue and earnings than Silver Bay Realty Trust. Silver Bay Realty Trust is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Summary

Sun Communities beats Silver Bay Realty Trust on 10 of the 12 factors compared between the two stocks.

Silver Bay Realty Trust Company Profile

Silver Bay Realty Trust Corp. is a real estate investment trust. It focuses on the acquisition, renovation, leasing and management of single-family properties in select markets in the United States. As of December 31, 2016, it had owned 9,044 single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio, South Carolina and Texas. Its investments in real estate consist of single-family properties located in various select markets, including Atlanta, Phoenix, Tampa, Charlotte, Orlando, Dallas, Jacksonville, Northern California, Las Vegas, Columbus, Tucson and Southeast Florida. The Charlotte market includes properties in South Carolina due to its proximity to Charlotte, North Carolina. The Northern California market consists of Contra Costa, Napa and Solano counties. The Southeast Florida market consists of Miami-Dade, Broward and Palm Beach counties. It conducts business and owns all of its properties through Silver Bay Operating Partnership L.P.

Sun Communities Company Profile

Sun Communities, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is a fully integrated real estate company, which, together with its affiliates and predecessors, has been in the business of acquiring, operating, developing, and expanding manufactured housing (MH) and recreational vehicle (RV). As of December 31, 2016, it owned and operated or had an interest in a portfolio of properties located throughout the United States and Ontario, Canada, including 226 MH communities, 87 RV communities, and 28 properties containing both MH and RV sites. The Company operates through two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, or has an interest in a portfolio, and develops MH communities and RV communities throughout the United States and is in the business of acquiring, operating, and expanding MH and RV communities.

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