Contrasting AvalonBay Communities (NYSE:AVB) and Boardwalk Real Estate Investment Trust (OTCMKTS:BOWFF)
by Kim Johansen · The Markets DailyBoardwalk Real Estate Investment Trust (OTCMKTS:BOWFF – Get Free Report) and AvalonBay Communities (NYSE:AVB – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.
Insider and Institutional Ownership
92.6% of AvalonBay Communities shares are held by institutional investors. 19.0% of Boardwalk Real Estate Investment Trust shares are held by insiders. Comparatively, 0.5% of AvalonBay Communities shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Boardwalk Real Estate Investment Trust and AvalonBay Communities’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Boardwalk Real Estate Investment Trust | 49.45% | 6.35% | 3.59% |
| AvalonBay Communities | 38.78% | 9.72% | 5.45% |
Risk and Volatility
Boardwalk Real Estate Investment Trust has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, AvalonBay Communities has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.
Valuation & Earnings
This table compares Boardwalk Real Estate Investment Trust and AvalonBay Communities”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Boardwalk Real Estate Investment Trust | $440.33 million | 4.95 | $429.28 million | $3.09 | 14.40 |
| AvalonBay Communities | $2.91 billion | 8.59 | $1.08 billion | $8.19 | 21.58 |
AvalonBay Communities has higher revenue and earnings than Boardwalk Real Estate Investment Trust. Boardwalk Real Estate Investment 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.
Analyst Ratings
This is a breakdown of recent recommendations for Boardwalk Real Estate Investment Trust and AvalonBay Communities, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Boardwalk Real Estate Investment Trust | 0 | 1 | 0 | 0 | 2.00 |
| AvalonBay Communities | 0 | 12 | 6 | 0 | 2.33 |
AvalonBay Communities has a consensus price target of $205.89, suggesting a potential upside of 16.48%. Given AvalonBay Communities’ stronger consensus rating and higher possible upside, analysts plainly believe AvalonBay Communities is more favorable than Boardwalk Real Estate Investment Trust.
Dividends
Boardwalk Real Estate Investment Trust pays an annual dividend of $1.15 per share and has a dividend yield of 2.6%. AvalonBay Communities pays an annual dividend of $7.00 per share and has a dividend yield of 4.0%. Boardwalk Real Estate Investment Trust pays out 37.2% of its earnings in the form of a dividend. AvalonBay Communities pays out 85.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities has increased its dividend for 3 consecutive years. AvalonBay Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
AvalonBay Communities beats Boardwalk Real Estate Investment Trust on 13 of the 17 factors compared between the two stocks.
About Boardwalk Real Estate Investment Trust
Boardwalk REIT strives to be Canada’s friendliest community provider and is a leading owner/operator of multi-family rental communities. Providing homes in more than 200 communities, with over 34,000 residential suites totaling over 29 million net rentable square feet, Boardwalk has a proven long-term track record of building better communities, where love always lives. Our three-tiered and distinct brands: Boardwalk Living, Boardwalk Communities, and Boardwalk Lifestyle, cater to a large diverse demographic and has evolved to capture the life cycle of all Resident Members. Boardwalk’s disciplined approach to capital allocation, acquisition, development, purposeful re-positioning, and management of apartment communities allows the Trust to provide its brand of community across Canada creating exceptional Resident Member experiences. Differentiated by its peak performance culture, Boardwalk is committed to delivering exceptional service, product quality and experience to our Resident Members who reward us with high retention and market leading operating results, which in turn, lead to higher free cash flow and investment returns, stable monthly distributions, and value creation for all our stakeholders. Boardwalk REIT’s Trust Units are listed on the Toronto Stock Exchange, trading under the symbol BEI.UN.
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.