Acadia Realty Trust (NYSE: AKR) and Agree Realty Corporation (NYSE:ADC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.

Institutional & Insider Ownership

86.9% of Agree Realty Corporation shares are held by institutional investors. 1.7% of Acadia Realty Trust shares are held by company insiders. Comparatively, 4.4% of Agree Realty Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Acadia Realty Trust and Agree Realty Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acadia Realty Trust 23.63% 2.50% 1.37%
Agree Realty Corporation 54.22% 8.23% 4.91%

Dividends

Acadia Realty Trust pays an annual dividend of $1.04 per share and has a dividend yield of 3.5%. Agree Realty Corporation pays an annual dividend of $2.02 per share and has a dividend yield of 4.0%. Acadia Realty Trust pays out 162.5% 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. Acadia Realty Trust has increased its dividend for 4 consecutive years and Agree Realty Corporation has increased its dividend for 4 consecutive years. Agree Realty Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Acadia Realty Trust and Agree Realty Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acadia Realty Trust $251.17 million 9.77 $140.01 million $0.64 45.84
Agree Realty Corporation $104.10 million 13.78 $84.76 million $2.23 22.65

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Acadia Realty Trust and Agree Realty Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Realty Trust 0 1 3 0 2.75
Agree Realty Corporation 0 4 6 0 2.60

Acadia Realty Trust presently has a consensus price target of $33.50, suggesting a potential upside of 14.18%. Agree Realty Corporation has a consensus price target of $51.63, suggesting a potential upside of 2.23%. Given Acadia Realty Trust’s stronger consensus rating and higher possible upside, equities analysts plainly believe Acadia Realty Trust is more favorable than Agree Realty Corporation.

Volatility and Risk

Acadia Realty Trust has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Agree Realty Corporation has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Summary

Agree Realty Corporation beats Acadia Realty Trust on 10 of the 16 factors compared between the two stocks.

Acadia Realty Trust Company Profile

Acadia Realty Trust is a real estate investment trust. The Company is focused on the ownership, acquisition, development and management of retail properties located in the United States. It operates through three segments: Core Portfolio, Funds and Structured Financing. Core Portfolio and Fund properties primarily consist of street and urban retail, and dense suburban shopping centers. Funds holds primarily retail real estate in which it co-invests with institutional investors. Structured Financing consists of earnings and expenses related to notes and mortgages receivable, which are held within the Core Portfolio or the Funds. As of December 31, 2016, it had ownership interests in 182 properties within its core portfolio. In the Core Portfolio segment, the Company owned an interest in a 311,000 square foot shopping center, a 28,000 square foot retail and an interest in an 87,000 square foot retail property, among others, as of December 31, 2016.

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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