Independence Realty Trust (NYSE:IRT) & Broadstone Net Lease (NYSE:BNL) Critical Analysis

Independence Realty Trust (NYSE:IRT) and Broadstone Net Lease (NYSE:BNL) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Dividends

Independence Realty Trust pays an annual dividend of $0.68 per share and has a dividend yield of 4.1%. Broadstone Net Lease pays an annual dividend of $1.16 per share and has a dividend yield of 6.4%. Independence Realty Trust pays out 566.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Broadstone Net Lease pays out 223.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Independence Realty Trust has increased its dividend for 3 consecutive years and Broadstone Net Lease has increased its dividend for 4 consecutive years. Broadstone Net Lease is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Independence Realty Trust and Broadstone Net Lease’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Independence Realty Trust	4.31%	0.78%	0.46%
Broadstone Net Lease	22.37%	3.19%	1.88%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Independence Realty Trust and Broadstone Net Lease, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independence Realty Trust	0	2	5	0	2.71
Broadstone Net Lease	0	2	5	1	2.88

Independence Realty Trust currently has a consensus price target of $22.14, indicating a potential upside of 34.00%. Broadstone Net Lease has a consensus price target of $19.43, indicating a potential upside of 7.31%. Given Independence Realty Trust’s higher probable upside, equities research analysts plainly believe Independence Realty Trust is more favorable than Broadstone Net Lease.

Institutional & Insider Ownership

88.3% of Independence Realty Trust shares are owned by institutional investors. Comparatively, 89.1% of Broadstone Net Lease shares are owned by institutional investors. 0.6% of Independence Realty Trust shares are owned by insiders. Comparatively, 1.0% of Broadstone Net Lease shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Independence Realty Trust and Broadstone Net Lease”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independence Realty Trust	$640.03 million	6.04	$39.29 million	$0.12	137.71
Broadstone Net Lease	$431.80 million	7.93	$162.44 million	$0.52	34.82

Broadstone Net Lease has lower revenue, but higher earnings than Independence Realty Trust. Broadstone Net Lease is trading at a lower price-to-earnings ratio than Independence Realty Trust, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Independence Realty Trust has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Broadstone Net Lease has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Summary

Broadstone Net Lease beats Independence Realty Trust on 14 of the 17 factors compared between the two stocks.

About Independence Realty Trust

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.