Contrasting Vornado Realty Trust (VNO) & Federal Realty Investment Trust (NYSE:FRT)
Vornado Realty Trust (NYSE: VNO) and Federal Realty Investment Trust (NYSE:FRT) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitabiliy.
This table compares Vornado Realty Trust and Federal Realty Investment Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Vornado Realty Trust||37.96%||4.51%||1.39%|
|Federal Realty Investment Trust||30.40%||10.91%||4.05%|
This is a summary of current ratings for Vornado Realty Trust and Federal Realty Investment Trust, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Vornado Realty Trust||0||4||4||0||2.50|
|Federal Realty Investment Trust||1||3||7||0||2.55|
Vornado Realty Trust currently has a consensus price target of $99.14, indicating a potential upside of 24.76%. Federal Realty Investment Trust has a consensus price target of $151.00, indicating a potential upside of 12.99%. Given Vornado Realty Trust’s higher probable upside, equities research analysts clearly believe Vornado Realty Trust is more favorable than Federal Realty Investment Trust.
Institutional and Insider Ownership
87.1% of Vornado Realty Trust shares are held by institutional investors. Comparatively, 94.8% of Federal Realty Investment Trust shares are held by institutional investors. 9.8% of Vornado Realty Trust shares are held by insiders. Comparatively, 1.1% of Federal Realty Investment Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Vornado Realty Trust pays an annual dividend of $2.40 per share and has a dividend yield of 3.0%. Federal Realty Investment Trust pays an annual dividend of $3.92 per share and has a dividend yield of 2.9%. Vornado Realty Trust pays out 51.7% of its earnings in the form of a dividend. Federal Realty Investment Trust pays out 113.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vornado Realty Trust has increased its dividend for 49 consecutive years. Vornado Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Vornado Realty Trust has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500.
Earnings & Valuation
This table compares Vornado Realty Trust and Federal Realty Investment Trust’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Vornado Realty Trust||$2.70 billion||5.58||$1.40 billion||$4.64||17.13|
|Federal Realty Investment Trust||$820.75 million||11.77||$525.43 million||$3.45||38.74|
Vornado Realty Trust has higher revenue and earnings than Federal Realty Investment Trust. Vornado Realty Trust is trading at a lower price-to-earnings ratio than Federal Realty Investment Trust, indicating that it is currently the more affordable of the two stocks.
Vornado Realty Trust beats Federal Realty Investment Trust on 10 of the 17 factors compared between the two stocks.
About Vornado Realty Trust
Vornado Realty Trust is a real estate investment trust (REIT). The Company conducts its business through Vornado Realty L.P. (the Operating Partnership). The Company operates through two segments: New York and Washington, DC. As of December 31, 2016, the Company’s New York segment consisted of 28.3 million square feet in 86 properties. Its properties include 1290 Avenue of the Americas, Two Penn Plaza, 770 Broadway and 90 Park Avenue. As of December 31, 2016, the Company’s Washington, DC segment consisted of 58 properties aggregating 14.7 million square feet, including 11.1 million square feet of office space in 44 properties, nine residential properties containing 3,156 units and a hotel property. Its properties include 2001 Jefferson Davis Highway, 223 23rd Street, 2221 South Clark Street and 1700 M Street. The Company’s interests in properties are held by the Operating Partnership. As of December 31, 2016, the Company owned the 3.7 million square foot Mart (theMart) in Chicago.
About Federal Realty Investment Trust
Federal Realty Investment Trust is an equity real estate investment trust (REIT). The Company specializes in the ownership, management and redevelopment of retail and mixed-use properties located primarily in affluent communities in selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California and South Florida. As of December 31, 2016, the Company owned or had an interest in community and neighborhood shopping centers and mixed-use properties, which operated as 96 retail real estate projects and included approximately 22.6 million square feet. As of December 31, 2016, its 96 retail shopping center and mixed-use properties were located in 12 states and the District of Columbia. As of December 31, 2016, there were approximately 2,900 leases with tenants providing a range of retail products and services. These tenants range from sole proprietorships to national retailers, or corporate group of tenants.
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