Critical Analysis: Sun Communities (NYSE:SUI) vs. W. P. Carey (NYSE:WPC)

W. P. Carey (NYSE:WPC) 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 dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Earnings and Valuation

This table compares W. P. Carey and Sun Communities’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W. P. Carey	$1.74 billion	6.86	$708.33 million	$2.63	20.77
Sun Communities	$3.21 billion	4.62	-$201.00 million	$1.16	102.38

W. P. Carey has higher earnings, but lower revenue than Sun Communities. W. P. Carey 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 W. P. Carey and Sun Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
W. P. Carey	33.65%	6.41%	3.13%
Sun Communities	4.46%	1.87%	0.84%

Dividends

W. P. Carey pays an annual dividend of $3.48 per share and has a dividend yield of 6.4%. Sun Communities pays an annual dividend of $3.76 per share and has a dividend yield of 3.2%. W. P. Carey pays out 132.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities pays out 324.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W. P. Carey is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and price targets for W. P. Carey and Sun Communities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W. P. Carey	1	9	1	0	2.00
Sun Communities	0	5	6	0	2.55

W. P. Carey currently has a consensus price target of $59.70, suggesting a potential upside of 9.30%. Sun Communities has a consensus price target of $136.27, suggesting a potential upside of 14.75%. Given Sun Communities’ stronger consensus rating and higher probable upside, analysts clearly believe Sun Communities is more favorable than W. P. Carey.

Risk & Volatility

W. P. Carey has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Insider and Institutional Ownership

73.7% of W. P. Carey shares are held by institutional investors. Comparatively, 99.6% of Sun Communities shares are held by institutional investors. 1.2% of W. P. Carey shares are held by insiders. Comparatively, 1.9% of Sun Communities shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

W. P. Carey beats Sun Communities on 9 of the 16 factors compared between the two stocks.

About W. P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.