National Retail Properties (NYSE: NNN) and Agree Realty Corporation (NYSE:ADC) are both retail reits companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.
Volatility & Risk
National Retail Properties has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Agree Realty Corporation has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.
Insider & Institutional Ownership
87.6% of National Retail Properties shares are held by institutional investors. Comparatively, 83.6% of Agree Realty Corporation shares are held by institutional investors. 1.0% of National Retail Properties shares are held by insiders. Comparatively, 4.4% of Agree Realty Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
National Retail Properties pays an annual dividend of $1.90 per share and has a dividend yield of 4.5%. Agree Realty Corporation pays an annual dividend of $2.02 per share and has a dividend yield of 4.2%. National Retail Properties pays out 155.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty Corporation pays out 99.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Retail Properties has increased its dividend for 7 consecutive years and Agree Realty Corporation has increased its dividend for 4 consecutive years. National Retail Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares National Retail Properties and Agree Realty Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|National Retail Properties||44.96%||8.47%||4.08%|
|Agree Realty Corporation||49.26%||7.27%||4.42%|
This is a summary of recent ratings and target prices for National Retail Properties and Agree Realty Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Retail Properties||0||0||5||0||3.00|
|Agree Realty Corporation||0||4||7||0||2.64|
National Retail Properties presently has a consensus target price of $48.25, indicating a potential upside of 14.42%. Agree Realty Corporation has a consensus target price of $51.71, indicating a potential upside of 6.25%. Given National Retail Properties’ stronger consensus rating and higher possible upside, equities analysts plainly believe National Retail Properties is more favorable than Agree Realty Corporation.
Earnings and Valuation
This table compares National Retail Properties and Agree Realty Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|National Retail Properties||$533.65 million||12.02||$239.50 million||$1.22||34.57|
|Agree Realty Corporation||$91.53 million||15.54||$45.11 million||$2.04||23.86|
National Retail Properties has higher revenue and earnings than Agree Realty Corporation. Agree Realty Corporation is trading at a lower price-to-earnings ratio than National Retail Properties, indicating that it is currently the more affordable of the two stocks.
Agree Realty Corporation beats National Retail Properties on 9 of the 17 factors compared between the two stocks.
About National Retail Properties
National Retail Properties, Inc. is a real estate investment trust (REIT). The Company acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment. As of December 31, 2016, it owned 2,535 properties with an aggregate gross leasable area of approximately 27,204,000 square feet, located in 48 states. The Company focuses on investing in a range of property and tenant types; leases, mortgages and other types of real estate interests; loans secured by personal property; loans secured by partnership or membership interests in partnerships or limited liability companies, and securities of other REITs, or other issuers, including for the purpose of exercising control over such entities. The Company owns a portfolio of freestanding retail stores across the United States. It owns approximately 2,290 stores, which are leased to over 400 tenants in approximately 40 different retail categories.
About Agree Realty Corporation
Agree Realty Corporation (Agree Realty) is an integrated real estate investment trust (REIT) primarily focused on the ownership, acquisition, development and management of retail properties. The Company operates through Agree Limited Partnership (the Operating Partnership). As of December 31, 2016, its portfolio consisted of 366 properties located in 43 states and totaling approximately seven million square feet of gross leasable area (GLA). As of December 31, 2016, its portfolio included 363 net lease properties, which contributed approximately 98.1% of annualized base rent, and three community shopping centers. The Company’s business objective is to generate consistent shareholder returns by investing in and actively managing a diversified portfolio of retail properties net leased to industry tenants. Its community shopping centers include Capital Plaza, Frankfort; Central Michigan Commons, Mount Pleasant, and West Frankfort Plaza, West Frankfort.
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