Head-To-Head Analysis: Sun Communities (NYSE:SUI) and Duke Realty (NYSE:DRE)

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Duke Realty (NYSE:DRE) and Sun Communities (NYSE:SUI) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Duke Realty pays an annual dividend of $0.86 per share and has a dividend yield of 2.6%. Sun Communities pays an annual dividend of $3.00 per share and has a dividend yield of 2.0%. Duke Realty pays out 64.7% of its earnings in the form of a dividend. Sun Communities pays out 65.5% 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. Duke Realty has increased its dividend for 4 consecutive years and Sun Communities has increased its dividend for 2 consecutive years. Duke Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Duke Realty has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500.

Valuation & Earnings

This table compares Duke Realty and Sun Communities’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Duke Realty $947.87 million 12.45 $383.73 million $1.33 24.68
Sun Communities $1.13 billion 11.89 $120.16 million $4.58 32.28

Duke Realty has higher earnings, but lower revenue than Sun Communities. Duke Realty is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Duke Realty and Sun Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Duke Realty 23.14% 4.82% 2.87%
Sun Communities 11.05% 4.01% 1.91%

Institutional & Insider Ownership

93.5% of Duke Realty shares are held by institutional investors. Comparatively, 90.4% of Sun Communities shares are held by institutional investors. 0.3% of Duke Realty shares are held by company insiders. Comparatively, 3.3% of Sun Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Duke Realty and Sun Communities, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Duke Realty 0 2 8 0 2.80
Sun Communities 0 3 2 0 2.40

Duke Realty currently has a consensus price target of $38.97, indicating a potential upside of 18.71%. Sun Communities has a consensus price target of $114.20, indicating a potential downside of 22.74%. Given Duke Realty’s stronger consensus rating and higher probable upside, research analysts plainly believe Duke Realty is more favorable than Sun Communities.

Summary

Duke Realty beats Sun Communities on 13 of the 17 factors compared between the two stocks.

Duke Realty Company Profile

Duke Realty Corporation owns and operates approximately 153 million rentable square feet of industrial assets in 20 major logistics markets. Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is listed on the S&P 500 Index.

Sun Communities Company Profile

Sun Communities, Inc. is a REIT that, as of March 31, 2019, owned, operated, or had an interest in a portfolio of 379 communities comprising over 132,000 developed sites in 31 states and Ontario, Canada.

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