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

Insider & Institutional Ownership

87.2% of Agree Realty shares are held by institutional investors. Comparatively, 98.2% of Ramco-Gershenson Properties Trust shares are held by institutional investors. 4.4% of Agree Realty shares are held by insiders. Comparatively, 3.7% of Ramco-Gershenson Properties Trust shares are held by 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 Agree Realty and Ramco-Gershenson Properties Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agree Realty 49.26% 7.27% 4.42%
Ramco-Gershenson Properties Trust 20.75% 6.96% 2.55%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Agree Realty and Ramco-Gershenson Properties Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agree Realty 0 2 7 0 2.78
Ramco-Gershenson Properties Trust 1 6 4 0 2.27

Agree Realty currently has a consensus target price of $54.57, indicating a potential upside of 8.04%. Ramco-Gershenson Properties Trust has a consensus target price of $15.13, indicating a potential upside of 5.25%. Given Agree Realty’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Agree Realty is more favorable than Ramco-Gershenson Properties Trust.

Earnings & Valuation

This table compares Agree Realty and Ramco-Gershenson Properties Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agree Realty $91.53 million 16.12 $45.11 million $2.04 24.76
Ramco-Gershenson Properties Trust $260.93 million 4.37 $59.66 million $0.57 25.21

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

Dividends

Agree Realty pays an annual dividend of $2.08 per share and has a dividend yield of 4.1%. Ramco-Gershenson Properties Trust pays an annual dividend of $0.88 per share and has a dividend yield of 6.1%. Agree Realty pays out 102.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ramco-Gershenson Properties Trust pays out 154.4% 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 has raised its dividend for 4 consecutive years and Ramco-Gershenson Properties Trust has raised its dividend for 4 consecutive years.

Volatility & Risk

Agree Realty has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Ramco-Gershenson Properties Trust has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Summary

Agree Realty beats Ramco-Gershenson Properties Trust on 10 of the 16 factors compared between the two stocks.

About Agree Realty

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.

About Ramco-Gershenson Properties Trust

Ramco-Gershenson Properties Trust is an equity real estate investment trust. The Company’s primary business is the ownership, management, redevelopment, development and operation of retail shopping centers. As of December 31, 2016, it owned and managed multi-anchored shopping centers in 12 metropolitan markets in the United States. It conducts its business through its operating partnership, Ramco-Gershenson Properties, L.P. It invests in large, multi-anchored shopping centers that include national chain store tenants and supermarket tenants. National chain anchor tenants in its centers include, among others, Bed Bath and Beyond, Dick’s Sporting Goods, and Home Depot. Supermarket anchor tenants in its centers include, among others, Publix Super Market, Whole Foods, Kroger and Sprouts. Its shopping centers are located in metropolitan markets, such as Metro Detroit, Southeast Florida, Greater Denver, Cincinnati, St. Louis, Jacksonville, Tampa/Lakeland, Milwaukee, Chicago and Atlanta.

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