Contrasting AmREIT (AMRE) and Agree Realty (ADC)

AmREIT (NYSE: AMRE) and Agree Realty (NYSE:ADC) are both small-cap financials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitability, risk and earnings.

Valuation and Earnings

This table compares AmREIT and Agree Realty’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AmREIT N/A N/A N/A $0.24 110.63
Agree Realty $91.53 million 14.46 $45.11 million $2.04 22.20

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

Analyst Ratings

This is a summary of recent ratings and target prices for AmREIT and Agree Realty, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AmREIT 0 0 0 0 N/A
Agree Realty 0 2 7 0 2.78

Agree Realty has a consensus target price of $54.63, suggesting a potential upside of 20.61%. Given Agree Realty’s higher possible upside, analysts clearly believe Agree Realty is more favorable than AmREIT.

Dividends

Agree Realty pays an annual dividend of $2.08 per share and has a dividend yield of 4.6%. AmREIT does not pay a dividend. 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. AmREIT has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

88.3% of Agree Realty shares are owned by institutional investors. 4.4% of Agree Realty 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.

Profitability

This table compares AmREIT and Agree Realty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AmREIT N/A N/A N/A
Agree Realty 49.26% 7.27% 4.42%

Summary

Agree Realty beats AmREIT on 10 of the 13 factors compared between the two stocks.

About AmREIT

AmREIT, Inc. (AmREIT) is a full service, vertically integrated and self-administered real estate investment trust (REIT) that owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with high barriers to entry. The Company’s shopping centers are anchored by national and local retailers, including supermarket chains, drug stores and other necessity-based retailers. In June 2013, AmREIT Inc announced that it has completed the acquisition of Fountain Oaks Shopping Center, a 160,600 square foot Kroger-anchored shopping center in the north Buckhead submarket of Atlanta, Georgia. Effective September 24, 2013, AmREIT Inc, through its AmREIT Realty Investment Corp subsidiary, acquired Woodlake Square Shopping Center, an owner and operator of shopping centers. In August 2014, AmREIT Inc completed the acquisition of Tuxedo Festival Shopping Center.

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.

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