Terreno Realty Corporation (NYSE: TRNO) and Monmouth Real Estate Investment Corporation (NYSE:MNR) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitabiliy, valuation and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Terreno Realty Corporation and Monmouth Real Estate Investment Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Terreno Realty Corporation 0 6 4 0 2.40
Monmouth Real Estate Investment Corporation 0 1 4 0 2.80

Terreno Realty Corporation currently has a consensus price target of $30.31, indicating a potential downside of 8.28%. Monmouth Real Estate Investment Corporation has a consensus price target of $15.60, indicating a potential upside of 1.63%. Given Monmouth Real Estate Investment Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Monmouth Real Estate Investment Corporation is more favorable than Terreno Realty Corporation.

Volatility and Risk

Terreno Realty Corporation has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Monmouth Real Estate Investment Corporation has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Dividends

Terreno Realty Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Monmouth Real Estate Investment Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 4.2%. Monmouth Real Estate Investment Corporation pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Terreno Realty Corporation has increased its dividend for 4 consecutive years and Monmouth Real Estate Investment Corporation has increased its dividend for 2 consecutive years.

Profitability

This table compares Terreno Realty Corporation and Monmouth Real Estate Investment Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Terreno Realty Corporation 11.02% 1.64% 1.01%
Monmouth Real Estate Investment Corporation 34.30% 8.40% 2.91%

Institutional and Insider Ownership

59.7% of Monmouth Real Estate Investment Corporation shares are owned by institutional investors. 3.0% of Terreno Realty Corporation shares are owned by company insiders. Comparatively, 5.3% of Monmouth Real Estate Investment Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Terreno Realty Corporation and Monmouth Real Estate Investment Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Terreno Realty Corporation $114.20 million 14.23 $61.70 million N/A N/A
Monmouth Real Estate Investment Corporation $104.18 million 10.69 $79.20 million $0.32 47.97

Monmouth Real Estate Investment Corporation has higher revenue, but lower earnings than Terreno Realty Corporation.

Summary

Monmouth Real Estate Investment Corporation beats Terreno Realty Corporation on 9 of the 15 factors compared between the two stocks.

Terreno Realty Corporation Company Profile

Terreno Realty Corporation acquires, owns and operates industrial real estate in coastal markets in the United States, such as Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, District of Columbia (D.C.)/Baltimore. The Company invests in a range of industrial real estate, including warehouse/distribution, flex (including light industrial and research and development) and trans-shipment. As of December 31, 2016, the Company owned 166 buildings aggregating approximately 12 million square feet and five land parcels consisting of 22.8 acres. As of December 31, 2016, its properties were leased to 376 customers. The Company focuses on functional buildings in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which it operates.

Monmouth Real Estate Investment Corporation Company Profile

Monmouth Real Estate Investment Corporation is a real estate investment trust (REIT). The Company’s primary business is the ownership of real estate. Its investment focus is to own single tenant, industrial buildings and leased to investment-grade tenants or their subsidiaries on long-term net leases. In addition, the Company owns a portfolio of REIT investment securities. Its assets are situated near airports, transportation hubs and manufacturing plants. The Company’s featured properties include ULTA Cosmetics, Milwaukee Tool, Beam Suntory, FedEx Supply Chain Services, Coca-Cola, Best Buy, International Paper, Home Depot, FedEx Ground, Actavis, Anheuser-Busch, United Technologies, Kellogg’s, Siemens, National Oilwell and Cardinal Health. The Company’s property portfolio consists of approximately 100 properties located in over 30 states, containing a total of approximately 16.6 million rentable square feet.

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