Critical Comparison: Agree Realty (ADC) & Its Competitors

Agree Realty (NYSE:ADC) is one of 85 publicly-traded companies in the “Retail REITs” industry, but how does it compare to its competitors? We will compare Agree Realty to similar businesses based on the strength of its valuation, institutional ownership, analyst recommendations, earnings, profitability, dividends and risk.

Profitability

This table compares Agree Realty and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Agree Realty	29.75%	4.00%	2.43%
Agree Realty Competitors	30.12%	5.04%	3.14%

Risk and Volatility

Agree Realty has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Agree Realty’s competitors have a beta of 0.88, suggesting that their average share price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Agree Realty and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Agree Realty	0	6	10	1	2.71
Agree Realty Competitors	963	3987	3457	139	2.32

Agree Realty currently has a consensus price target of $79.85, suggesting a potential upside of 14.93%. As a group, “Retail REITs” companies have a potential upside of 9.14%. Given Agree Realty’s stronger consensus rating and higher possible upside, research analysts clearly believe Agree Realty is more favorable than its competitors.

Earnings and Valuation

This table compares Agree Realty and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Agree Realty	$810.28 million	$204.35 million	35.81
Agree Realty Competitors	$829.08 million	$253.68 million	9.22

Agree Realty’s competitors have higher revenue and earnings than Agree Realty. Agree Realty is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Agree Realty pays an annual dividend of $3.25 per share and has a dividend yield of 4.7%. Agree Realty pays out 167.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Retail REITs” companies pay a dividend yield of 230.6% and pay out 78.0% of their earnings in the form of a dividend. Agree Realty has increased its dividend for 1 consecutive years. Agree Realty lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Insider and Institutional Ownership

97.8% of Agree Realty shares are owned by institutional investors. Comparatively, 59.3% of shares of all “Retail REITs” companies are owned by institutional investors. 1.8% of Agree Realty shares are owned by company insiders. Comparatively, 11.5% of shares of all “Retail REITs” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Agree Realty competitors beat Agree Realty on 9 of the 15 factors compared.

Agree Realty Company Profile

Agree Realty Corporation is a real estate investment trust (REIT) focused on acquiring, developing and managing net-leased properties, primarily occupied by retail businesses. Its portfolio includes freestanding stores and other properties leased to national and regional retailers. Under net leases, tenants generally assume responsibility for property expenses such as taxes, insurance and maintenance, while Agree Realty owns the real estate and collects rent. The company’s properties are located across the United States.