Reviewing Elme Communities (NYSE:ELME) and Equity Lifestyle Properties (NYSE:ELS)

Equity Lifestyle Properties (NYSE:ELS) and Elme Communities (NYSE:ELME) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Dividends

Equity Lifestyle Properties pays an annual dividend of $2.06 per share and has a dividend yield of 3.4%. Elme Communities pays an annual dividend of $0.72 per share and has a dividend yield of 4.1%. Equity Lifestyle Properties pays out 103.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Elme Communities pays out -47.4% of its earnings in the form of a dividend. Equity Lifestyle Properties has increased its dividend for 21 consecutive years. Elme Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Equity Lifestyle Properties has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Elme Communities has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Equity Lifestyle Properties and Elme Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity Lifestyle Properties	24.97%	20.99%	6.71%
Elme Communities	-54.57%	-13.15%	-7.52%

Earnings and Valuation

This table compares Equity Lifestyle Properties and Elme Communities”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Lifestyle Properties	$1.53 billion	7.77	$367.01 million	$1.99	30.74
Elme Communities	$241.93 million	6.40	-$13.10 million	($1.52)	-11.56

Equity Lifestyle Properties has higher revenue and earnings than Elme Communities. Elme Communities is trading at a lower price-to-earnings ratio than Equity Lifestyle Properties, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Equity Lifestyle Properties and Elme Communities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Lifestyle Properties	0	3	8	1	2.83
Elme Communities	1	3	0	0	1.75

Equity Lifestyle Properties currently has a consensus target price of $70.50, indicating a potential upside of 15.26%. Elme Communities has a consensus target price of $18.50, indicating a potential upside of 5.32%. Given Equity Lifestyle Properties’ stronger consensus rating and higher possible upside, equities analysts plainly believe Equity Lifestyle Properties is more favorable than Elme Communities.

Insider and Institutional Ownership

97.2% of Equity Lifestyle Properties shares are held by institutional investors. Comparatively, 87.9% of Elme Communities shares are held by institutional investors. 0.7% of Equity Lifestyle Properties shares are held by company insiders. Comparatively, 1.4% of Elme Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Equity Lifestyle Properties beats Elme Communities on 15 of the 18 factors compared between the two stocks.

About Equity Lifestyle Properties

Equity LifeStyle Properties, Inc. is a real estate investment trust, which engages in the ownership and operation of lifestyle-oriented properties consisting primarily of manufactured home, and recreational vehicle communities. It operates through the following segments: Property Operations and Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease properties. The Home Sales and Rentals Operations segment purchases, sells, and leases homes. The company was founded by James M. Hankins in December 1992 and is headquartered in Chicago, IL.

About Elme Communities

Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.