Critical Analysis: Agree Realty (NYSE:ADC) and Federal Realty Investment Trust (NYSE:FRT)

Federal Realty Investment Trust (NYSE:FRT) and Agree Realty (NYSE:ADC) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for Federal Realty Investment Trust and Agree Realty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Realty Investment Trust	0	9	7	1	2.53
Agree Realty	0	6	8	1	2.67

Federal Realty Investment Trust presently has a consensus price target of $112.13, indicating a potential upside of 8.73%. Agree Realty has a consensus price target of $83.21, indicating a potential upside of 10.69%. Given Agree Realty’s stronger consensus rating and higher probable upside, analysts plainly believe Agree Realty is more favorable than Federal Realty Investment Trust.

Institutional & Insider Ownership

93.9% of Federal Realty Investment Trust shares are held by institutional investors. Comparatively, 97.8% of Agree Realty shares are held by institutional investors. 1.0% of Federal Realty Investment Trust shares are held by company insiders. Comparatively, 1.8% of Agree Realty shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Federal Realty Investment Trust has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Agree Realty has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Dividends

Federal Realty Investment Trust pays an annual dividend of $4.52 per share and has a dividend yield of 4.4%. Agree Realty pays an annual dividend of $3.14 per share and has a dividend yield of 4.2%. Federal Realty Investment Trust pays out 96.8% 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 pays out 177.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has increased its dividend for 58 consecutive years and Agree Realty has increased its dividend for 1 consecutive years. Federal Realty Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Federal Realty Investment Trust and Agree Realty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Realty Investment Trust	$1.28 billion	6.96	$411.08 million	$4.67	22.08
Agree Realty	$718.40 million	12.56	$204.35 million	$1.77	42.47

Federal Realty Investment Trust has higher revenue and earnings than Agree Realty. Federal Realty Investment 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 Federal Realty Investment Trust and Agree Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal Realty Investment Trust	32.14%	13.10%	4.67%
Agree Realty	28.44%	3.79%	2.32%

Summary

Federal Realty Investment Trust beats Agree Realty on 10 of the 17 factors compared between the two stocks.

About Federal Realty Investment Trust

Federal Realty Investment Trust is an equity real estate investment trust, which engages in the provision of ownership, management, and redevelopment of retail and mixed-use properties located primarily in communities where demand exceeds supply in strategically selected metropolitan markets. The company was founded in 1962 and is headquartered in North Bethesda, MD.

About Agree Realty

Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of December 31, 2023, the Company owned and operated a portfolio of 2,135 properties, located in 49 states and containing approximately 44.2 million square feet of gross leasable area. The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC".