Washington Prime Group (NYSE: WPG) and Agree Realty Corporation (NYSE:ADC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Washington Prime Group and Agree Realty Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Prime Group 22.65% 17.36% 3.73%
Agree Realty Corporation 54.22% 8.23% 4.91%

Insider and Institutional Ownership

92.0% of Washington Prime Group shares are owned by institutional investors. Comparatively, 86.9% of Agree Realty Corporation shares are owned by institutional investors. 0.3% of Washington Prime Group shares are owned by company insiders. Comparatively, 4.4% of Agree Realty Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Washington Prime Group has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Agree Realty Corporation has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Washington Prime Group and Agree Realty Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Prime Group 1 0 0 0 1.00
Agree Realty Corporation 0 4 6 0 2.60

Agree Realty Corporation has a consensus price target of $51.63, suggesting a potential upside of 2.23%. Given Agree Realty Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Agree Realty Corporation is more favorable than Washington Prime Group.

Valuation & Earnings

This table compares Washington Prime Group and Agree Realty Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Washington Prime Group $819.27 million 1.90 $487.39 million $0.92 9.09
Agree Realty Corporation $104.10 million 13.78 $84.76 million $2.23 22.65

Washington Prime Group has higher revenue and earnings than Agree Realty Corporation. Washington Prime Group is trading at a lower price-to-earnings ratio than Agree Realty Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Washington Prime Group pays an annual dividend of $1.00 per share and has a dividend yield of 12.0%. Agree Realty Corporation pays an annual dividend of $2.02 per share and has a dividend yield of 4.0%. Washington Prime Group pays out 108.7% 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 Corporation pays out 90.6% 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 Corporation has increased its dividend for 4 consecutive years.

Summary

Agree Realty Corporation beats Washington Prime Group on 11 of the 17 factors compared between the two stocks.

Washington Prime Group Company Profile

Washington Prime Group Inc. (WPG Inc.), formerly WP Glimcher Inc., operates as a self-administered and self-managed real estate investment trust (REIT). The Company’s primary business is the ownership, development and management of retail real estate within the United States. The Company owns, develops and manages enclosed retail properties and community centers. As of December 31, 2016, its assets consisted of material interests in 114 shopping centers in the United States, consisting of approximately 63 million square feet of gross leasable area. The Company also owns parcels of land, which can be used for either the development of new shopping centers or the expansion of existing properties. Washington Prime Group, L.P. is the Company’s majority-owned partnership subsidiary that owns, develops and manages, through its affiliates, all of WPG Inc.’s real estate properties and other assets. Its properties include Irving Mall, Lindale Mall, Markland Plaza and Royal Eagle Plaza.

Agree Realty Corporation 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.

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