Critical Analysis: American Tower (NYSE:AMT) versus Rayonier (NYSE:RYN)

American Tower (NYSE:AMT) and Rayonier (NYSE:RYN) are both real estate companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings for American Tower and Rayonier, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Tower	0	2	17	1	2.95
Rayonier	0	5	0	1	2.33

American Tower presently has a consensus price target of $215.48, indicating a potential upside of 33.76%. Rayonier has a consensus price target of $24.80, indicating a potential upside of 36.05%. Given Rayonier’s higher probable upside, analysts clearly believe Rayonier is more favorable than American Tower.

Risk & Volatility

American Tower has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Rayonier has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Insider & Institutional Ownership

92.7% of American Tower shares are held by institutional investors. Comparatively, 89.1% of Rayonier shares are held by institutional investors. 0.1% of American Tower shares are held by company insiders. Comparatively, 0.9% of Rayonier shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares American Tower and Rayonier”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Tower	$10.64 billion	7.05	$2.53 billion	$7.27	22.16
Rayonier	$484.50 million	11.20	$474.38 million	$0.45	40.51

American Tower has higher revenue and earnings than Rayonier. American Tower is trading at a lower price-to-earnings ratio than Rayonier, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Tower and Rayonier’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Tower	31.08%	32.76%	5.36%
Rayonier	7.83%	3.49%	2.37%

Dividends

American Tower pays an annual dividend of $7.16 per share and has a dividend yield of 4.4%. Rayonier pays an annual dividend of $1.04 per share and has a dividend yield of 5.7%. American Tower pays out 98.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rayonier pays out 231.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Tower has raised its dividend for 12 consecutive years.

Summary

American Tower beats Rayonier on 11 of the 17 factors compared between the two stocks.

About American Tower

American Tower, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.

About Rayonier

Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. As of December 31, 2023, Rayonier owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S. South (1.85 million acres), U.S. Pacific Northwest (418,000 acres) and New Zealand (421,000 acres).