Critical Survey: BRT Apartments (NYSE:BRT) and Farmland Partners (NYSE:FPI)

Farmland Partners (NYSE:FPIGet Rating) and BRT Apartments (NYSE:BRTGet Rating) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Dividends

Farmland Partners pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. BRT Apartments pays an annual dividend of $0.92 per share and has a dividend yield of 4.5%. Farmland Partners pays out -90.9% of its earnings in the form of a dividend. BRT Apartments pays out 37.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Farmland Partners has raised its dividend for 1 consecutive years and BRT Apartments has raised its dividend for 1 consecutive years.

Profitability

This table compares Farmland Partners and BRT Apartments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmland Partners 10.44% 1.52% 0.51%
BRT Apartments 121.97% 22.09% 10.49%

Institutional & Insider Ownership

44.3% of Farmland Partners shares are owned by institutional investors. Comparatively, 28.3% of BRT Apartments shares are owned by institutional investors. 13.6% of Farmland Partners shares are owned by insiders. Comparatively, 37.9% of BRT Apartments shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Farmland Partners has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, BRT Apartments has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Farmland Partners and BRT Apartments, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmland Partners 0 1 2 0 2.67
BRT Apartments 0 1 3 0 2.75

Farmland Partners presently has a consensus target price of $14.25, suggesting a potential downside of 1.72%. BRT Apartments has a consensus target price of $27.33, suggesting a potential upside of 32.88%. Given BRT Apartments’ stronger consensus rating and higher probable upside, analysts clearly believe BRT Apartments is more favorable than Farmland Partners.

Earnings & Valuation

This table compares Farmland Partners and BRT Apartments’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Farmland Partners $51.74 million 14.03 $9.99 million ($0.22) -65.91
BRT Apartments $32.06 million 11.91 $29.11 million $2.46 8.36

BRT Apartments has lower revenue, but higher earnings than Farmland Partners. Farmland Partners is trading at a lower price-to-earnings ratio than BRT Apartments, indicating that it is currently the more affordable of the two stocks.

Summary

BRT Apartments beats Farmland Partners on 12 of the 16 factors compared between the two stocks.

About Farmland Partners (Get Rating)

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns approximately 155,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.

About BRT Apartments (Get Rating)

BRT is a real estate investment trust that owns, operates and develops multi-family properties.

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