Inland Real Estate (NYSE: IRC) and Easterly Government Properties (NYSE:DEA) are both small-cap financials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Institutional and Insider Ownership
99.0% of Easterly Government Properties shares are held by institutional investors. 15.6% of Easterly Government Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Inland Real Estate and Easterly Government Properties, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Inland Real Estate||0||0||0||0||N/A|
|Easterly Government Properties||0||0||2||0||3.00|
Easterly Government Properties has a consensus target price of $23.50, indicating a potential upside of 20.20%. Given Easterly Government Properties’ higher possible upside, analysts plainly believe Easterly Government Properties is more favorable than Inland Real Estate.
Earnings and Valuation
This table compares Inland Real Estate and Easterly Government Properties’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Inland Real Estate||N/A||N/A||N/A||$0.10||106.10|
|Easterly Government Properties||$104.62 million||8.20||$3.41 million||$0.10||195.50|
Easterly Government Properties has higher revenue and earnings than Inland Real Estate. Inland Real Estate is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.
This table compares Inland Real Estate and Easterly Government Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Inland Real Estate||-0.49%||-2.46%||-0.06%|
|Easterly Government Properties||3.12%||0.54%||0.32%|
Inland Real Estate pays an annual dividend of $0.57 per share and has a dividend yield of 5.4%. Easterly Government Properties pays an annual dividend of $1.04 per share and has a dividend yield of 5.3%. Inland Real Estate pays out 570.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Easterly Government Properties pays out 1,040.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Inland Real Estate has raised its dividend for 2 consecutive years. Inland Real Estate is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Easterly Government Properties beats Inland Real Estate on 8 of the 12 factors compared between the two stocks.
About Inland Real Estate
IRC Retail Centers, Inc., formerly Inland Real Estate Corporation, is a real estate investment trust (REIT). The Company owns, operates and develops open-air neighborhood, community and power shopping centers and single tenant retail properties located throughout the Central and Southeastern United States. Through its subsidiaries, Inland Commercial Property Management, Inc. (ICPM) and Inland TRS Property Management, Inc., the Company manages all properties it owns interests in and properties for certain third parties and related parties. The Company owns investment properties located in the States of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Minnesota, Missouri, Nebraska, New York, North Carolina, Ohio, Oklahoma, South Carolina, Texas, Virginia and Wisconsin. The Company owns interests in approximately 130 investment properties, including those owned through its unconsolidated joint ventures.
About Easterly Government Properties
Easterly Government Properties, Inc. is an internally managed real estate investment trust (REIT). The Company focuses on the acquisition, development and management of Class A commercial properties that are leased to the United States Government agencies. The Company leases its properties to such agencies through the United States General Services Administration (GSA). The operations of the Company are carried on primarily through Easterly Government Properties, LP and the subsidiaries of the Operating Partnership. As of December 31, 2016, it had 43 operating properties in the United States, including 40 operating properties that are leased primarily to the United States Government tenant agencies and three operating properties that are entirely leased to private tenants, encompassing approximately 3.1 million square feet in the aggregate. In addition, the Company had one property under development encompassing approximately 0.1 million square feet as of December 31, 2016.
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