Comparing Agree Realty (ADC) and Four Corners Property Trust (FCPT)

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

Earnings and Valuation

This table compares Agree Realty and Four Corners Property Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agree Realty $91.53 million 14.86 $45.11 million $2.04 22.82
Four Corners Property Trust $124.02 million 11.02 $156.80 million $1.41 15.84

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

Profitability

This table compares Agree Realty and Four Corners Property 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%
Four Corners Property Trust 65.46% 17.37% 8.56%

Insider & Institutional Ownership

89.7% of Agree Realty shares are held by institutional investors. Comparatively, 86.8% of Four Corners Property Trust shares are held by institutional investors. 4.4% of Agree Realty shares are held by insiders. Comparatively, 0.2% of Four Corners Property Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Agree Realty has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, Four Corners Property Trust has a beta of -0.24, indicating that its stock price is 124% 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 4.5%. Four Corners Property Trust pays an annual dividend of $1.10 per share and has a dividend yield of 4.9%. 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. Four Corners Property Trust pays out 78.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty has increased its dividend for 5 consecutive years. Four Corners Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations and price targets for Agree Realty and Four Corners Property Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agree Realty 0 2 7 0 2.78
Four Corners Property Trust 0 1 2 0 2.67

Agree Realty presently has a consensus price target of $54.63, suggesting a potential upside of 17.32%. Four Corners Property Trust has a consensus price target of $26.67, suggesting a potential upside of 19.37%. Given Four Corners Property Trust’s higher possible upside, analysts plainly believe Four Corners Property Trust is more favorable than Agree Realty.

Summary

Agree Realty beats Four Corners Property Trust on 9 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 Four Corners Property Trust

Four Corners Property Trust, Inc. is a self-administered company and real estate investment trust (REIT), which owns, acquires and leases properties for use in the restaurant and food service related industries. The Company operates through two segments: real estate operations and restaurant operations. Its real estate operations segment consists of rental revenues primarily generated by leasing restaurant properties to tenants through triple-net lease arrangements under which the tenant is primarily responsible for ongoing costs relating to the properties. Its restaurant operations segment is conducted through its taxable REIT subsidiary, Kerrow Holdings, LLC, and consists of its Kerrow Restaurant Operating Business. As of December 19, 2017, it had owned 506 properties, all within the continental United States. Of these properties, 418 were held for investment and leased to tenants under triple-net leases and had an aggregate leasable area of approximately 3.4 million square feet.

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