Essential Properties Realty Trust (NYSE:EPRT) and Great Ajax (NYSE:AJX) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Essential Properties Realty Trust and Great Ajax, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essential Properties Realty Trust 1 3 5 0 2.44
Great Ajax 0 0 3 0 3.00

Essential Properties Realty Trust currently has a consensus target price of $20.22, indicating a potential upside of 34.46%. Great Ajax has a consensus target price of $12.50, indicating a potential upside of 47.23%. Given Great Ajax’s stronger consensus rating and higher possible upside, analysts clearly believe Great Ajax is more favorable than Essential Properties Realty Trust.

Dividends

Essential Properties Realty Trust pays an annual dividend of $0.92 per share and has a dividend yield of 6.1%. Great Ajax pays an annual dividend of $0.68 per share and has a dividend yield of 8.0%. Essential Properties Realty Trust pays out 146.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Great Ajax pays out 45.0% of its earnings in the form of a dividend. Essential Properties Realty Trust has raised its dividend for 1 consecutive years and Great Ajax has raised its dividend for 4 consecutive years. Great Ajax is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Essential Properties Realty Trust has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Great Ajax has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500.

Insider & Institutional Ownership

96.0% of Essential Properties Realty Trust shares are held by institutional investors. Comparatively, 66.9% of Great Ajax shares are held by institutional investors. 1.6% of Essential Properties Realty Trust shares are held by company insiders. Comparatively, 6.6% of Great Ajax shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Essential Properties Realty Trust and Great Ajax’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Essential Properties Realty Trust $139.36 million 9.93 $41.84 million $0.63 23.87
Great Ajax $64.92 million 3.00 $34.71 million $1.51 5.62

Essential Properties Realty Trust has higher revenue and earnings than Great Ajax. Great Ajax is trading at a lower price-to-earnings ratio than Essential Properties Realty Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Essential Properties Realty Trust and Great Ajax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Essential Properties Realty Trust 33.17% 4.24% 2.57%
Great Ajax 43.43% 5.75% 1.34%

Summary

Great Ajax beats Essential Properties Realty Trust on 10 of the 17 factors compared between the two stocks.

Essential Properties Realty Trust Company Profile

Essential Properties Realty Trust, Inc., a real estate company, acquires, owns, and manages single-tenant properties in the United States. The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical services, convenience stores, entertainment, early childhood education, and health and fitness on a long-term basis. As of December 31, 2018, it had a portfolio of 677 properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2016 and is based in Princeton, New Jersey.

Great Ajax Company Profile

Great Ajax Corp. acquires, invests in, and manages a portfolio of residential mortgage and small balance commercial mortgage loans. It also holds real estate-owned properties acquired upon the foreclosure or other settlement of its non-performing loans, as well as through outright purchases. The company elected to be taxed as a real estate investment trust for U.S. federal income tax purposes. It generally would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Great Ajax Corp. was founded in 2014 and is based in Beaverton, Oregon.

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