Financial Analysis: Federal Realty Investment Trust (FRT) & Vereit (VER)
Federal Realty Investment Trust (NYSE: FRT) and Vereit (NYSE:VER) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.
This table compares Federal Realty Investment Trust and Vereit’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Federal Realty Investment Trust||35.50%||13.28%||4.82%|
Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.6%. Vereit pays an annual dividend of $0.55 per share and has a dividend yield of 7.9%. Federal Realty Investment Trust pays out 97.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vereit pays out -549.9% of its earnings in the form of a dividend. Vereit has raised its dividend for 50 consecutive years. Vereit is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current ratings for Federal Realty Investment Trust and Vereit, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Federal Realty Investment Trust||1||2||9||0||2.67|
Federal Realty Investment Trust currently has a consensus target price of $139.82, suggesting a potential upside of 26.17%. Vereit has a consensus target price of $9.50, suggesting a potential upside of 37.09%. Given Vereit’s higher probable upside, analysts clearly believe Vereit is more favorable than Federal Realty Investment Trust.
Institutional and Insider Ownership
94.5% of Federal Realty Investment Trust shares are held by institutional investors. Comparatively, 85.0% of Vereit shares are held by institutional investors. 1.1% of Federal Realty Investment Trust shares are held by insiders. Comparatively, 0.1% of Vereit shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Risk & Volatility
Federal Realty Investment Trust has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500. Comparatively, Vereit has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.
Valuation & Earnings
This table compares Federal Realty Investment Trust and Vereit’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Federal Realty Investment Trust||$801.59 million||10.12||$249.91 million||$4.10||27.03|
|Vereit||$1.45 billion||4.64||-$195.86 million||($0.10)||-69.29|
Federal Realty Investment Trust has higher earnings, but lower revenue than Vereit. Vereit is trading at a lower price-to-earnings ratio than Federal Realty Investment Trust, indicating that it is currently the more affordable of the two stocks.
Federal Realty Investment Trust beats Vereit on 10 of the 16 factors compared between the two stocks.
Federal Realty Investment Trust Company Profile
Federal Realty Investment Trust is an equity real estate investment trust (REIT). The Company specializes in the ownership, management and redevelopment of retail and mixed-use properties located primarily in affluent communities in selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California and South Florida. As of December 31, 2016, the Company owned or had an interest in community and neighborhood shopping centers and mixed-use properties, which operated as 96 retail real estate projects and included approximately 22.6 million square feet. As of December 31, 2016, its 96 retail shopping center and mixed-use properties were located in 12 states and the District of Columbia. As of December 31, 2016, there were approximately 2,900 leases with tenants providing a range of retail products and services. These tenants range from sole proprietorships to national retailers, or corporate group of tenants.
Vereit Company Profile
VEREIT, Inc. is a full-service real estate operating company. The Company owns and manages a diversified portfolio of retail, restaurant, office and industrial real estate assets. It operates through two segments: real estate investment (REI) segment and its investment management segment, Cole Capital. The Company manages real estate investments on behalf of the Cole Capital. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include publicly registered, non-traded real estate investment trusts (REITs). The Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (CCA), which is a subsidiary of the Operating Partnership. The Company’s portfolio consists of Industrial distribution, shopping centers and single-tenant retail. The Company serves in various industries, such as casual dining restaurants, manufacturing, quick service restaurants, grocery and super market, home and garden retail and logistics.
Receive News & Ratings for Federal Realty Investment Trust Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Federal Realty Investment Trust and related companies with MarketBeat.com's FREE daily email newsletter.