Critical Analysis: Cedar Realty Trust (CDR) & Agree Realty Corporation (ADC)
Cedar Realty Trust (NYSE: CDR) and Agree Realty Corporation (NYSE:ADC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.
This is a breakdown of current ratings and target prices for Cedar Realty Trust and Agree Realty Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cedar Realty Trust||1||2||3||0||2.33|
|Agree Realty Corporation||0||4||6||0||2.60|
Cedar Realty Trust currently has a consensus target price of $6.25, suggesting a potential upside of 8.70%. Agree Realty Corporation has a consensus target price of $51.88, suggesting a potential upside of 5.18%. Given Cedar Realty Trust’s higher probable upside, analysts plainly believe Cedar Realty Trust is more favorable than Agree Realty Corporation.
Earnings & Valuation
This table compares Cedar Realty Trust and Agree Realty Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cedar Realty Trust||$147.44 million||3.21||$81.98 million||($0.06)||-95.82|
|Agree Realty Corporation||$104.10 million||13.46||$84.76 million||$2.23||22.12|
Agree Realty Corporation has higher revenue, but lower earnings than Cedar Realty Trust. Cedar Realty Trust 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.
Cedar Realty Trust pays an annual dividend of $0.20 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 4.1%. Cedar Realty Trust pays out -333.3% of its earnings in the form of a dividend. 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 raised its dividend for 4 consecutive years. Agree Realty Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Cedar Realty Trust has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Agree Realty Corporation has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.
This table compares Cedar Realty Trust and Agree Realty Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cedar Realty Trust||6.58%||2.49%||0.77%|
|Agree Realty Corporation||54.22%||8.23%||4.91%|
Insider & Institutional Ownership
92.2% of Cedar Realty Trust shares are owned by institutional investors. Comparatively, 85.3% of Agree Realty Corporation shares are owned by institutional investors. 4.5% of Cedar Realty Trust shares are owned by insiders. Comparatively, 4.4% of Agree Realty Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Agree Realty Corporation beats Cedar Realty Trust on 11 of the 17 factors compared between the two stocks.
About Cedar Realty Trust
Cedar Realty Trust, Inc. is a real estate investment trust (REIT). The Company focuses on ownership and operation of grocery-anchored shopping centers straddling the Washington District of Columbia (DC) to Boston corridor. As of December 31, 2016, the Company owned and managed a portfolio of 61 operating properties (excluding properties held for sale) totaling approximately 9.1 million square feet of gross leasable area (GLA). The Company focuses its investment activities on grocery-anchored shopping centers. The Company’s properties portfolio comprises 26 properties in Pennsylvania, eight properties in Massachusetts, seven properties in Connecticut, seven properties in Maryland / Washington, D.C, eight properties in Virginia, four properties in New Jersey and one property in New York. The Company’s 106 are going to expire in the year 2017. The Company conducts all of its businesses through the Cedar Realty Trust Partnership L.P. (the Operating Partnership).
About Agree Realty Corporation
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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