Invitation Homes vs American Homes 4 Rent

Invitation Homes and American Homes 4 Rent are two of the largest players in the single-family rental home industry, offering investors exposure to the growing demand for rental properties across the United States. Both companies provide a unique opportunity for investors to benefit from the increasing number of individuals choosing to rent rather than buy a home. By examining the stocks of Invitation Homes and American Homes 4 Rent, investors can gain insight into the potential for growth and stability in the rental property market.

Invitation Homes or American Homes 4 Rent?

When comparing Invitation Homes and American Homes 4 Rent, 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 Invitation Homes and American Homes 4 Rent.

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. Invitation Homes has a dividend yield of 4.12%, while American Homes 4 Rent has a dividend yield of 3.36%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Invitation Homes reports a 5-year dividend growth of 24.57% year and a payout ratio of 139.13%. On the other hand, American Homes 4 Rent reports a 5-year dividend growth of 34.49% year and a payout ratio of 99.77%.

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 Invitation Homes P/E ratio at 42.98 and American Homes 4 Rent's P/E ratio at 37.57. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Invitation Homes P/B ratio is 2.04 while American Homes 4 Rent's P/B ratio is 1.96.

Growth Investors:

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

Retail Investors:

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