Medalist Diversified REIT (NASDAQ:MDRR) & Clipper Realty (NYSE:CLPR) Critical Analysis

Medalist Diversified REIT (NASDAQ:MDRR) and Clipper Realty (NYSE:CLPR) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Dividends

Medalist Diversified REIT pays an annual dividend of $0.27 per share and has a dividend yield of 2.4%. Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 11.4%. Medalist Diversified REIT pays out -14.7% of its earnings in the form of a dividend. Clipper Realty pays out -27.7% 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. Medalist Diversified REIT has increased its dividend for 2 consecutive years. Clipper Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Medalist Diversified REIT and Clipper Realty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medalist Diversified REIT	$10.40 million	1.54	-$2.39 million	($1.84)	-6.09
Clipper Realty	$153.20 million	0.35	-$19.90 million	($1.37)	-2.44

Medalist Diversified REIT has higher earnings, but lower revenue than Clipper Realty. Medalist Diversified REIT is trading at a lower price-to-earnings ratio than Clipper Realty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Medalist Diversified REIT and Clipper Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medalist Diversified REIT	-22.37%	-9.28%	-2.86%
Clipper Realty	-12.99%	N/A	-1.60%

Analyst Ratings

This is a summary of current recommendations for Medalist Diversified REIT and Clipper Realty, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medalist Diversified REIT	1	0	0	0	1.00
Clipper Realty	0	1	0	0	2.00

Volatility and Risk

Medalist Diversified REIT has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, Clipper Realty has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Institutional & Insider Ownership

17.4% of Medalist Diversified REIT shares are owned by institutional investors. Comparatively, 37.6% of Clipper Realty shares are owned by institutional investors. 43.8% of Medalist Diversified REIT shares are owned by insiders. Comparatively, 53.0% of Clipper Realty shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Clipper Realty beats Medalist Diversified REIT on 12 of the 15 factors compared between the two stocks.

About Medalist Diversified REIT

Medalist Diversified REIT Inc. is a Virginia-based real estate investment trust that specializes in acquiring, owning and managing commercial real estate in the Southeast region of the U.S. The Company's strategy is to focus on commercial real estate which is expected to provide an attractive balance of risk and returns. Medalist utilizes a rigorous, consistent and replicable process for sourcing and conducting due diligence of acquisitions.

About Clipper Realty

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn.