Apartment Income REIT (NYSE:AIRC) vs. Phillips Edison & Company, Inc. (NASDAQ:PECO) Critical Survey

Phillips Edison & Company, Inc. (NASDAQ:PECO) and Apartment Income REIT (NYSE:AIRC) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Phillips Edison & Company, Inc. and Apartment Income REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Phillips Edison & Company, Inc.	9.33%	2.21%	1.21%
Apartment Income REIT	79.54%	25.86%	10.17%

Institutional & Insider Ownership

80.7% of Phillips Edison & Company, Inc. shares are held by institutional investors. Comparatively, 98.1% of Apartment Income REIT shares are held by institutional investors. 8.0% of Phillips Edison & Company, Inc. shares are held by company insiders. Comparatively, 1.0% of Apartment Income REIT 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.

Valuation & Earnings

This table compares Phillips Edison & Company, Inc. and Apartment Income REIT’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Phillips Edison & Company, Inc.	$610.12 million	6.33	$56.85 million	$0.46	68.54
Apartment Income REIT	$820.04 million	6.84	$635.10 million	$4.26	9.07

Apartment Income REIT has higher revenue and earnings than Phillips Edison & Company, Inc.. Apartment Income REIT is trading at a lower price-to-earnings ratio than Phillips Edison & Company, Inc., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Phillips Edison & Company, Inc. and Apartment Income REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Phillips Edison & Company, Inc.	1	4	3	0	2.25
Apartment Income REIT	0	8	1	0	2.11

Phillips Edison & Company, Inc. presently has a consensus target price of $37.57, suggesting a potential upside of 19.16%. Apartment Income REIT has a consensus target price of $36.59, suggesting a potential downside of 5.33%. Given Phillips Edison & Company, Inc.’s stronger consensus rating and higher possible upside, analysts clearly believe Phillips Edison & Company, Inc. is more favorable than Apartment Income REIT.

Dividends

Phillips Edison & Company, Inc. pays an annual dividend of $1.17 per share and has a dividend yield of 3.7%. Apartment Income REIT pays an annual dividend of $1.80 per share and has a dividend yield of 4.7%. Phillips Edison & Company, Inc. pays out 254.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apartment Income REIT pays out 42.3% of its earnings in the form of a dividend. Phillips Edison & Company, Inc. has increased its dividend for 1 consecutive years. Apartment Income REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Phillips Edison & Company, Inc. has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Apartment Income REIT has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Summary

Apartment Income REIT beats Phillips Edison & Company, Inc. on 11 of the 17 factors compared between the two stocks.

About Phillips Edison & Company, Inc.

Phillips Edison & Company, Inc. (PECO) is one of the nation's largest owners and operators of omni-channel grocery-anchored shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO's centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO's top grocery anchors include Kroger, Publix, Albertsons and Ahold Delhaize. As of December 31, 2023, PECO managed 301 shopping centers, including 281 wholly-owned centers comprising 32.2 million square feet across 31 states and 20 shopping centers owned in one institutional joint venture. PECO is exclusively focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.

About Apartment Income REIT

Apartment Income REIT Corp (NYSE: AIRC) is a publicly traded, self-administered real estate investment trust (REIT). AIR's portfolio comprises 76 communities totaling 27,010 apartment homes located in 10 states and the District of Columbia. AIR offers a simple, predictable business model with focus on what we call the AIR Edge, the cumulative result of our focus on resident selection, satisfaction, and retention, as well as relentless innovation in delivering best-in-class property management. The AIR Edge is a durable operating advantage in driving organic growth, as well as making possible the opportunity for excess returns for properties new to AIR's platform.