Analyzing Vereit (VER) & Federal Realty Investment Trust (FRT)

Vereit (NYSE: VER) and Federal Realty Investment Trust (NYSE:FRT) are both mid-cap financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Earnings and Valuation

This table compares Vereit and Federal Realty Investment Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vereit $1.45 billion 4.47 -$195.86 million ($0.13) -51.38
Federal Realty Investment Trust $801.59 million 9.78 $249.91 million $3.14 34.43

Federal Realty Investment Trust has lower revenue, but higher earnings than Vereit. Vereit 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.

Volatility & Risk

Vereit has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Vereit and Federal Realty Investment Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vereit 0 1 2 0 2.67
Federal Realty Investment Trust 1 2 9 0 2.67

Vereit presently has a consensus price target of $9.50, suggesting a potential upside of 42.22%. Federal Realty Investment Trust has a consensus price target of $140.82, suggesting a potential upside of 30.25%. Given Vereit’s higher possible upside, equities research analysts plainly believe Vereit is more favorable than Federal Realty Investment Trust.

Profitability

This table compares Vereit and Federal Realty Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vereit -3.76% -0.61% -0.34%
Federal Realty Investment Trust 35.50% 13.28% 4.82%

Dividends

Vereit pays an annual dividend of $0.55 per share and has a dividend yield of 8.2%. Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.7%. Vereit pays out -423.1% of its earnings in the form of a dividend. Federal Realty Investment Trust pays out 127.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has increased its dividend for 50 consecutive years. Vereit is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

85.2% of Vereit shares are held by institutional investors. Comparatively, 94.3% of Federal Realty Investment Trust shares are held by institutional investors. 0.1% of Vereit shares are held by company insiders. Comparatively, 1.1% of Federal Realty Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Federal Realty Investment Trust beats Vereit on 11 of the 16 factors compared between the two stocks.

About Vereit

VEREIT, Inc. is a full-service real estate operating company. The Company owns and manages a diversified portfolio of retail, restaurant, office and industrial real estate assets. It operates through two segments: real estate investment (REI) segment and its investment management segment, Cole Capital. The Company manages real estate investments on behalf of the Cole Capital. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include publicly registered, non-traded real estate investment trusts (REITs). The Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (CCA), which is a subsidiary of the Operating Partnership. The Company’s portfolio consists of Industrial distribution, shopping centers and single-tenant retail. The Company serves in various industries, such as casual dining restaurants, manufacturing, quick service restaurants, grocery and super market, home and garden retail and logistics.

About Federal Realty Investment Trust

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.

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