Monmouth Real Estate Investment Corporation (NYSE: MNR) and VEREIT (NYSE:VER) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Monmouth Real Estate Investment Corporation 32.02% 7.91% 2.69%
VEREIT -2.72% -0.44% -0.25%

Risk & Volatility

Monmouth Real Estate Investment Corporation has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, VEREIT has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Monmouth Real Estate Investment Corporation $108.67 million 10.89 $82.64 million $0.30 53.07
VEREIT $1.40 billion 5.94 $1.12 billion ($0.11) -77.63

VEREIT has higher revenue and earnings than Monmouth Real Estate Investment Corporation. VEREIT is trading at a lower price-to-earnings ratio than Monmouth Real Estate Investment Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

60.6% of Monmouth Real Estate Investment Corporation shares are held by institutional investors. Comparatively, 86.0% of VEREIT shares are held by institutional investors. 5.3% of Monmouth Real Estate Investment Corporation shares are held by company insiders. Comparatively, 0.1% of VEREIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Monmouth Real Estate Investment Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 4.0%. VEREIT pays an annual dividend of $0.55 per share and has a dividend yield of 6.4%. Monmouth Real Estate Investment Corporation pays out 213.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. VEREIT pays out -500.0% of its earnings in the form of a dividend. VEREIT has raised its dividend for 2 consecutive years. VEREIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Monmouth Real Estate Investment Corporation and VEREIT, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monmouth Real Estate Investment Corporation 0 1 3 0 2.75
VEREIT 1 2 4 0 2.43

Monmouth Real Estate Investment Corporation currently has a consensus price target of $16.75, suggesting a potential upside of 5.21%. VEREIT has a consensus price target of $9.88, suggesting a potential upside of 15.63%. Given VEREIT’s higher probable upside, analysts clearly believe VEREIT is more favorable than Monmouth Real Estate Investment Corporation.

Summary

VEREIT beats Monmouth Real Estate Investment Corporation on 9 of the 17 factors compared between the two stocks.

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 105 properties located in over 30 states, containing a total of approximately 17.9 million rentable square feet.

VEREIT Company Profile

VEREIT, Inc. is a full-service real estate operating company. The Company operates through two business segments: real estate investment (REI) segment and investment management segment, Cole Capital. As of December 31, 2016, through its REI segment, the Company owned and managed a portfolio of 4,142 retail, restaurant, office and industrial real estate properties with an aggregate of 93.3 million square feet, which are located in 49 states, Puerto Rico and Canada. Through its Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of certain non-listed real estate investment trusts (the Cole REITs) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include over four publicly registered, non-traded REITs.

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