Reviewing Sun Communities (NYSE:SUI) and Broadstone Net Lease (NYSE:BNL)

Broadstone Net Lease (NYSE:BNL) and Sun Communities (NYSE:SUI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

89.1% of Broadstone Net Lease shares are held by institutional investors. Comparatively, 99.6% of Sun Communities shares are held by institutional investors. 0.6% of Broadstone Net Lease shares are held by company insiders. Comparatively, 1.8% of Sun Communities shares are held by company 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.

Analyst Ratings

This is a summary of recent ratings and target prices for Broadstone Net Lease and Sun Communities, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadstone Net Lease	0	3	7	1	2.82
Sun Communities	1	8	5	0	2.29

Broadstone Net Lease currently has a consensus price target of $19.89, indicating a potential upside of 9.73%. Sun Communities has a consensus price target of $137.23, indicating a potential upside of 8.38%. Given Broadstone Net Lease’s stronger consensus rating and higher possible upside, equities analysts plainly believe Broadstone Net Lease is more favorable than Sun Communities.

Dividends

Broadstone Net Lease pays an annual dividend of $1.16 per share and has a dividend yield of 6.4%. Sun Communities pays an annual dividend of $4.16 per share and has a dividend yield of 3.3%. Broadstone Net Lease pays out 246.8% 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 pays out 52.1% of its earnings in the form of a dividend. Broadstone Net Lease has increased its dividend for 4 consecutive years and Sun Communities has increased its dividend for 8 consecutive years.

Profitability

This table compares Broadstone Net Lease and Sun Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadstone Net Lease	20.04%	2.91%	1.71%
Sun Communities	42.58%	-4.51%	-2.19%

Valuation and Earnings

This table compares Broadstone Net Lease and Sun Communities”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadstone Net Lease	$447.97 million	7.65	$162.44 million	$0.47	38.56
Sun Communities	$3.22 billion	4.86	$101.80 million	$7.98	15.87

Broadstone Net Lease has higher earnings, but lower revenue than Sun Communities. Sun Communities is trading at a lower price-to-earnings ratio than Broadstone Net Lease, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Broadstone Net Lease has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Sun Communities has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Summary

Broadstone Net Lease beats Sun Communities on 11 of the 18 factors compared between the two stocks.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.