Head-To-Head Review: Equity Lifestyle Properties (NYSE:ELS) & SBA Communications (NYSE:SBAC)

Equity Lifestyle Properties (NYSE:ELS) and SBA Communications (NASDAQ:SBAC) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares Equity Lifestyle Properties and SBA Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Lifestyle Properties 27.02% 22.00% 6.89%
SBA Communications 6.75% -4.12% 1.64%

Volatility & Risk

Equity Lifestyle Properties has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, SBA Communications has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Dividends

Equity Lifestyle Properties pays an annual dividend of $2.45 per share and has a dividend yield of 2.0%. SBA Communications pays an annual dividend of $1.48 per share and has a dividend yield of 0.6%. Equity Lifestyle Properties pays out 63.3% of its earnings in the form of a dividend. SBA Communications pays out 19.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Equity Lifestyle Properties has raised its dividend for 8 consecutive years. Equity Lifestyle Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Equity Lifestyle Properties and SBA Communications’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity Lifestyle Properties $986.65 million 11.51 $212.61 million $3.87 32.23
SBA Communications $1.87 billion 14.87 $47.45 million $7.60 32.23

Equity Lifestyle Properties has higher earnings, but lower revenue than SBA Communications. Equity Lifestyle Properties is trading at a lower price-to-earnings ratio than SBA Communications, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

94.4% of Equity Lifestyle Properties shares are held by institutional investors. Comparatively, 94.3% of SBA Communications shares are held by institutional investors. 5.1% of Equity Lifestyle Properties shares are held by insiders. Comparatively, 2.5% of SBA Communications shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Equity Lifestyle Properties and SBA Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Lifestyle Properties 0 4 1 0 2.20
SBA Communications 0 8 5 0 2.38

Equity Lifestyle Properties currently has a consensus target price of $106.70, indicating a potential downside of 14.46%. SBA Communications has a consensus target price of $230.08, indicating a potential downside of 6.08%. Given SBA Communications’ stronger consensus rating and higher possible upside, analysts plainly believe SBA Communications is more favorable than Equity Lifestyle Properties.

Summary

SBA Communications beats Equity Lifestyle Properties on 9 of the 17 factors compared between the two stocks.

About Equity Lifestyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of January 28, 2019, we own or have an interest in 409 quality properties in 33 states and British Columbia consisting of 153,984 sites.

About SBA Communications

SBA Communications Corporation is a first choice provider and leading owner and operator of wireless communications infrastructure in North, Central, and South America. By “Building Better Wireless,” SBA generates revenue from two primary businesses – site leasing and site development services. The primary focus of the Company is the leasing of antenna space on its multi-tenant communication sites to a variety of wireless service providers under long-term lease contracts.

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