Analyzing Acadia Realty Trust (AKR) and Retail Opportunity Investments (ROIC)

Acadia Realty Trust (NYSE: AKR) and Retail Opportunity Investments (NASDAQ:ROIC) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Dividends

Acadia Realty Trust pays an annual dividend of $1.08 per share and has a dividend yield of 4.9%. Retail Opportunity Investments pays an annual dividend of $0.75 per share and has a dividend yield of 4.5%. Acadia Realty Trust pays out 152.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Retail Opportunity Investments pays out 220.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Acadia Realty Trust has raised its dividend for 5 consecutive years. Acadia Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Acadia Realty Trust and Retail Opportunity Investments’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acadia Realty Trust $189.94 million 9.66 $72.77 million $0.71 30.86
Retail Opportunity Investments $237.19 million 7.69 $32.48 million $0.34 48.88

Acadia Realty Trust has higher earnings, but lower revenue than Retail Opportunity Investments. Acadia Realty Trust is trading at a lower price-to-earnings ratio than Retail Opportunity Investments, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Acadia Realty Trust has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, Retail Opportunity Investments has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Insider & Institutional Ownership

98.3% of Retail Opportunity Investments shares are owned by institutional investors. 1.7% of Acadia Realty Trust shares are owned by insiders. Comparatively, 2.2% of Retail Opportunity Investments 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Acadia Realty Trust and Retail Opportunity Investments, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Realty Trust 0 2 2 0 2.50
Retail Opportunity Investments 0 4 3 0 2.43

Acadia Realty Trust currently has a consensus target price of $33.50, indicating a potential upside of 52.90%. Retail Opportunity Investments has a consensus target price of $22.17, indicating a potential upside of 33.37%. Given Acadia Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Acadia Realty Trust is more favorable than Retail Opportunity Investments.

Profitability

This table compares Acadia Realty Trust and Retail Opportunity Investments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acadia Realty Trust 25.34% 2.77% 1.50%
Retail Opportunity Investments 14.13% 2.86% 1.34%

Summary

Acadia Realty Trust beats Retail Opportunity Investments on 10 of the 17 factors compared between the two stocks.

Acadia Realty Trust Company Profile

Acadia Realty Trust is a real estate investment trust. The Company is focused on the ownership, acquisition, development and management of retail properties located in the United States. It operates through three segments: Core Portfolio, Funds and Structured Financing. Core Portfolio and Fund properties primarily consist of street and urban retail, and dense suburban shopping centers. Funds holds primarily retail real estate in which it co-invests with institutional investors. Structured Financing consists of earnings and expenses related to notes and mortgages receivable, which are held within the Core Portfolio or the Funds. As of December 31, 2016, it had ownership interests in 182 properties within its core portfolio. In the Core Portfolio segment, the Company owned an interest in a 311,000 square foot shopping center, a 28,000 square foot retail and an interest in an 87,000 square foot retail property, among others, as of December 31, 2016.

Retail Opportunity Investments Company Profile

Retail Opportunity Investments Corp. (ROIC) is a fully integrated, self-managed real estate investment trust (REIT). The Company specializes in the acquisition, ownership and management of necessity-based community and neighborhood shopping centers on the west coast of the United States, anchored by supermarkets and drugstores. Retail Opportunity Investments Partnership, LP is the operating partnership of the Company. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business. As of September 30, 2017, the Company’s portfolio consisted of 87 properties totaling approximately 10.0 million square feet of gross leasable area (GLA). As of September 30, 2017, the Company’s portfolio was approximately 97.3% leased.

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