American Homes 4 Rent vs Invitation Homes

American Homes 4 Rent and Invitation Homes are two of the largest single-family rental home companies in the United States. Both companies have seen significant growth in recent years as the demand for rental properties continues to increase. Both stocks have been attractive options for investors looking to capitalize on the booming real estate market. However, there are some key differences between the two companies that investors should consider before making a decision. In this comparison, we will examine the strengths and weaknesses of American Homes 4 Rent and Invitation Homes stocks.

American Homes 4 Rent or Invitation Homes?

When comparing American Homes 4 Rent and Invitation Homes, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between American Homes 4 Rent and Invitation Homes.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. American Homes 4 Rent has a dividend yield of 3.36%, while Invitation Homes has a dividend yield of 4.12%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. American Homes 4 Rent reports a 5-year dividend growth of 34.49% year and a payout ratio of 99.77%. On the other hand, Invitation Homes reports a 5-year dividend growth of 24.57% year and a payout ratio of 139.13%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with American Homes 4 Rent P/E ratio at 37.57 and Invitation Homes's P/E ratio at 42.98. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. American Homes 4 Rent P/B ratio is 1.96 while Invitation Homes's P/B ratio is 2.04.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, American Homes 4 Rent has seen a 5-year revenue growth of 0.24%, while Invitation Homes's is 0.20%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Homes 4 Rent's ROE at 5.25% and Invitation Homes's ROE at 4.70%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $37.38 for American Homes 4 Rent and $33.40 for Invitation Homes. Over the past year, American Homes 4 Rent's prices ranged from $31.36 to $41.41, with a yearly change of 32.05%. Invitation Homes's prices fluctuated between $28.49 and $37.80, with a yearly change of 32.68%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.