Head-To-Head Comparison: Agree Realty (ADC) and Saul Centers (BFS)

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

Earnings and Valuation

This table compares Agree Realty and Saul Centers’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agree Realty $91.53 million 14.47 $45.11 million $2.04 22.22
Saul Centers $217.07 million 5.06 $45.27 million $1.63 30.76

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Agree Realty and Saul Centers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agree Realty 0 2 7 0 2.78
Saul Centers 0 1 1 0 2.50

Agree Realty currently has a consensus price target of $54.63, suggesting a potential upside of 20.51%. Given Agree Realty’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Agree Realty is more favorable than Saul Centers.

Profitability

This table compares Agree Realty and Saul Centers’ 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%
Saul Centers 21.42% 23.93% 3.44%

Institutional & Insider Ownership

87.9% of Agree Realty shares are owned by institutional investors. Comparatively, 45.3% of Saul Centers shares are owned by institutional investors. 4.4% of Agree Realty shares are owned by company insiders. Comparatively, 48.8% of Saul Centers shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Agree Realty has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Dividends

Agree Realty pays an annual dividend of $2.08 per share and has a dividend yield of 4.6%. Saul Centers pays an annual dividend of $2.08 per share and has a dividend yield of 4.1%. 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. Saul Centers pays out 127.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty has raised its dividend for 5 consecutive years and Saul Centers has raised its dividend for 4 consecutive years. Agree Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Agree Realty beats Saul Centers on 11 of the 17 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 Saul Centers

Saul Centers, Inc. operates as a real estate investment trust. The Company’s principal business activity is the ownership, management and development of income-producing properties. It operates through two segments: Shopping Centers and Mixed-Use Properties. The Company, which conducts all of its activities through its subsidiaries, the Saul Holdings Limited Partnership (Operating Partnership) and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-used properties in the Washington, District of Columbia/Baltimore metropolitan area. As of December 31, 2016, it properties (the Current Portfolio Properties) consisted of 49 shopping center properties (the Shopping Centers), six mixed-use properties, which consists of office, retail and multi-family residential uses (the Mixed-Use Properties) and three (non-operating) development properties.

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