American Homes 4 Rent (NYSE:AMH) and W. P. Carey (NYSE:WPC) Critical Analysis

American Homes 4 Rent (NYSE:AMH) and W. P. Carey (NYSE:WPC) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Dividends

American Homes 4 Rent pays an annual dividend of $1.04 per share and has a dividend yield of 2.8%. W. P. Carey pays an annual dividend of $3.52 per share and has a dividend yield of 6.4%. American Homes 4 Rent pays out 108.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W. P. Carey pays out 138.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for American Homes 4 Rent and W. P. Carey, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Homes 4 Rent	0	4	12	0	2.75
W. P. Carey	1	6	2	0	2.11

American Homes 4 Rent presently has a consensus target price of $41.38, indicating a potential upside of 11.37%. W. P. Carey has a consensus target price of $63.25, indicating a potential upside of 14.83%. Given W. P. Carey’s higher probable upside, analysts clearly believe W. P. Carey is more favorable than American Homes 4 Rent.

Risk and Volatility

American Homes 4 Rent has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, W. P. Carey has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares American Homes 4 Rent and W. P. Carey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Homes 4 Rent	21.51%	4.76%	2.84%
W. P. Carey	35.12%	6.45%	3.14%

Earnings and Valuation

This table compares American Homes 4 Rent and W. P. Carey”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Homes 4 Rent	$1.70 billion	8.07	$380.17 million	$0.96	38.70
W. P. Carey	$1.59 billion	7.58	$708.33 million	$2.54	21.69

W. P. Carey has lower revenue, but higher earnings than American Homes 4 Rent. W. P. Carey is trading at a lower price-to-earnings ratio than American Homes 4 Rent, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

91.9% of American Homes 4 Rent shares are held by institutional investors. Comparatively, 73.7% of W. P. Carey shares are held by institutional investors. 6.1% of American Homes 4 Rent shares are held by company insiders. Comparatively, 1.1% of W. P. Carey shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

About American Homes 4 Rent

AMH (NYSE: AMH) is a leading large-scale integrated owner, operator and developer of single-family rental homes. We're an internally managed Maryland real estate investment trust (REIT) focused on acquiring, developing, renovating, leasing and managing homes as rental properties. Our goal is to simplify the experience of leasing a home and deliver peace of mind to households across the country. In recent years, we've been named one of Fortune's 2023 Best Workplaces in Real Estate, a 2023 Great Place to Work, a 2023 Most Loved Workplace, a 2023 Top U.S. Homebuilder by Builder100, and one of America's Most Responsible Companies 2023 and America's Most Trustworthy Companies 2023 by Newsweek and Statista Inc. As of December 31, 2023, we owned nearly 60,000 single-family properties in the Southeast, Midwest, Southwest and Mountain West regions of the United States.

About W. P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.