Federal Realty Investment Trust (NYSE: FRT) and First Potomac Realty Trust (NYSE:FPO) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.
Volatility & Risk
Federal Realty Investment Trust has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, First Potomac Realty Trust has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.
Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.0%. First Potomac Realty Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.6%. Federal Realty Investment Trust pays out 97.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Potomac Realty Trust pays out 58.0% of its earnings in the form of a dividend. First Potomac Realty Trust has increased its dividend for 49 consecutive years. First Potomac Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
94.6% of Federal Realty Investment Trust shares are held by institutional investors. Comparatively, 93.1% of First Potomac Realty Trust shares are held by institutional investors. 1.1% of Federal Realty Investment Trust shares are held by company insiders. Comparatively, 2.1% of First Potomac Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Federal Realty Investment Trust and First Potomac Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Federal Realty Investment Trust||35.50%||13.28%||4.82%|
|First Potomac Realty Trust||-7.99%||-2.35%||-0.94%|
Valuation & Earnings
This table compares Federal Realty Investment Trust and First Potomac Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Federal Realty Investment Trust||$801.59 million||12.00||$249.91 million||$4.10||32.33|
|First Potomac Realty Trust||N/A||N/A||N/A||$0.69||16.14|
Federal Realty Investment Trust has higher revenue and earnings than First Potomac Realty Trust. First Potomac 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.
This is a summary of recent ratings and recommmendations for Federal Realty Investment Trust and First Potomac Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Federal Realty Investment Trust||1||2||8||0||2.64|
|First Potomac Realty Trust||2||1||1||0||1.75|
Federal Realty Investment Trust presently has a consensus price target of $140.80, indicating a potential upside of 6.23%. First Potomac Realty Trust has a consensus price target of $11.29, indicating a potential upside of 1.32%. Given Federal Realty Investment Trust’s stronger consensus rating and higher probable upside, equities analysts plainly believe Federal Realty Investment Trust is more favorable than First Potomac Realty Trust.
Federal Realty Investment Trust beats First Potomac Realty Trust on 9 of the 14 factors compared between the two stocks.
Federal Realty Investment Trust Company Profile
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.
First Potomac Realty Trust Company Profile
First Potomac Realty Trust (First Potomac) is engaged in ownership, management, redevelopment and development of office and business park properties in the greater Washington, D.C. region. The Company’s segments include Washington, D.C., Maryland, Northern Virginia and Southern Virginia. The Company conducts its business through First Potomac Realty Investment Limited Partnership, its operating partnership. The Company’s portfolio consist a mix of single-tenant and multi-tenant office properties, and business parks. The office properties are single-story and multi-story buildings that are primarily for office uses, and business parks consists of buildings with office features combined with some industrial property space. As of December 31, 2016, the Company owned properties totaling 6.7 million square feet and had a non-controlling ownership interest in properties totaling an additional 0.9 million square feet through five unconsolidated joint ventures.
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