Financial Contrast: City Office REIT (NYSE:CIO) vs. Sun Communities (NYSE:SUI)

City Office REIT (NYSE:CIO) and Sun Communities (NYSE:SUI) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares City Office REIT and Sun Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
City Office REIT	-10.33%	-2.74%	-1.19%
Sun Communities	7.46%	3.21%	1.40%

Insider and Institutional Ownership

67.5% of City Office REIT shares are owned by institutional investors. Comparatively, 99.6% of Sun Communities shares are owned by institutional investors. 3.9% of City Office REIT shares are owned by insiders. Comparatively, 1.9% of Sun Communities shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for City Office REIT and Sun Communities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
City Office REIT	0	0	0	0	0.00
Sun Communities	1	6	5	0	2.33

Sun Communities has a consensus price target of $135.55, suggesting a potential upside of 2.00%. Given Sun Communities’ stronger consensus rating and higher probable upside, analysts clearly believe Sun Communities is more favorable than City Office REIT.

Earnings and Valuation

This table compares City Office REIT and Sun Communities”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
City Office REIT	$171.13 million	1.20	-$2.68 million	($0.62)	-8.22
Sun Communities	$3.20 billion	5.29	-$201.00 million	$0.74	179.58

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

Volatility and Risk

City Office REIT has a beta of 2, meaning that its share price is 100% more volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Dividends

City Office REIT pays an annual dividend of $0.40 per share and has a dividend yield of 7.9%. Sun Communities pays an annual dividend of $3.76 per share and has a dividend yield of 2.8%. City Office REIT pays out -64.5% of its earnings in the form of a dividend. Sun Communities pays out 508.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. City Office REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Sun Communities beats City Office REIT on 11 of the 16 factors compared between the two stocks.

About City Office REIT

City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located predominantly in Sun Belt markets. City Office currently owns or has a controlling interest in 5.7 million square feet of office properties. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.

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.