Agree Realty (NYSE: ADC) and Saul Centers (NYSE:BFS) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.
This is a summary of current ratings and recommmendations for Agree Realty and Saul Centers, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Agree Realty currently has a consensus price target of $54.63, indicating a potential upside of 17.32%. Given Agree Realty’s stronger consensus rating and higher possible upside, equities analysts plainly believe Agree Realty is more favorable than Saul Centers.
Institutional and Insider Ownership
87.9% of Agree Realty shares are owned by institutional investors. Comparatively, 45.3% of Saul Centers shares are owned by institutional investors. 4.4% of Agree Realty shares are owned by insiders. Comparatively, 48.8% of Saul Centers shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility and Risk
Agree Realty has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.
Earnings and Valuation
This table compares Agree Realty and Saul Centers’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Agree Realty||$91.53 million||14.86||$45.11 million||$2.04||22.82|
|Saul Centers||$217.07 million||5.19||$45.27 million||$1.63||31.56|
Saul Centers has higher revenue and earnings than Agree Realty. Agree Realty is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.
Agree Realty pays an annual dividend of $2.08 per share and has a dividend yield of 4.5%. Saul Centers pays an annual dividend of $2.08 per share and has a dividend yield of 4.0%. Agree Realty pays out 102.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saul Centers pays out 127.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty has increased its dividend for 5 consecutive years and Saul Centers has increased its dividend for 4 consecutive years. Agree Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Agree Realty and Saul Centers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Agree Realty beats Saul Centers on 11 of the 17 factors compared between the two stocks.
Agree Realty Company Profile
Agree Realty Corporation (Agree Realty) is an integrated real estate investment trust (REIT) primarily focused on the ownership, acquisition, development and management of retail properties. The Company operates through Agree Limited Partnership (the Operating Partnership). As of December 31, 2016, its portfolio consisted of 366 properties located in 43 states and totaling approximately seven million square feet of gross leasable area (GLA). As of December 31, 2016, its portfolio included 363 net lease properties, which contributed approximately 98.1% of annualized base rent, and three community shopping centers. The Company’s business objective is to generate consistent shareholder returns by investing in and actively managing a diversified portfolio of retail properties net leased to industry tenants. Its community shopping centers include Capital Plaza, Frankfort; Central Michigan Commons, Mount Pleasant, and West Frankfort Plaza, West Frankfort.
Saul Centers Company Profile
Saul Centers, Inc. operates as a real estate investment trust. The Company’s principal business activity is the ownership, management and development of income-producing properties. It operates through two segments: Shopping Centers and Mixed-Use Properties. The Company, which conducts all of its activities through its subsidiaries, the Saul Holdings Limited Partnership (Operating Partnership) and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-used properties in the Washington, District of Columbia/Baltimore metropolitan area. As of December 31, 2016, it properties (the Current Portfolio Properties) consisted of 49 shopping center properties (the Shopping Centers), six mixed-use properties, which consists of office, retail and multi-family residential uses (the Mixed-Use Properties) and three (non-operating) development properties.
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