Agree Realty Corporation (NYSE: ADC) and Kimco Realty Corporation (NYSE:KIM) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Dividends

Agree Realty Corporation pays an annual dividend of $2.02 per share and has a dividend yield of 4.1%. Kimco Realty Corporation pays an annual dividend of $1.08 per share and has a dividend yield of 5.7%. Agree Realty Corporation pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kimco Realty Corporation pays out 220.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty Corporation has raised its dividend for 4 consecutive years and Kimco Realty Corporation has raised its dividend for 7 consecutive years. Kimco Realty Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Agree Realty Corporation and Kimco Realty Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Agree Realty Corporation $104.10 million 13.54 $84.76 million $2.23 22.26
Kimco Realty Corporation $1.17 billion 6.95 $764.78 million $0.49 39.00

Kimco Realty Corporation has higher revenue and earnings than Agree Realty Corporation. Agree Realty Corporation is trading at a lower price-to-earnings ratio than Kimco Realty Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Agree Realty Corporation and Kimco Realty Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agree Realty Corporation 0 4 6 0 2.60
Kimco Realty Corporation 0 6 7 0 2.54

Agree Realty Corporation currently has a consensus target price of $51.88, indicating a potential upside of 4.52%. Kimco Realty Corporation has a consensus target price of $24.97, indicating a potential upside of 30.66%. Given Kimco Realty Corporation’s higher probable upside, analysts clearly believe Kimco Realty Corporation is more favorable than Agree Realty Corporation.

Insider and Institutional Ownership

85.3% of Agree Realty Corporation shares are held by institutional investors. Comparatively, 89.1% of Kimco Realty Corporation shares are held by institutional investors. 4.4% of Agree Realty Corporation shares are held by company insiders. Comparatively, 2.9% of Kimco Realty Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Agree Realty Corporation and Kimco Realty Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agree Realty Corporation 54.22% 8.23% 4.91%
Kimco Realty Corporation 21.77% 4.68% 2.23%

Volatility and Risk

Agree Realty Corporation has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Kimco Realty Corporation has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Summary

Agree Realty Corporation beats Kimco Realty Corporation on 9 of the 17 factors compared between the two stocks.

Agree Realty Corporation Company Profile

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.

Kimco Realty Corporation Company Profile

Kimco Realty Corporation is a self-administered real estate investment trust. The Company is engaged in the ownership, management, development and operation of open-air shopping centers, which are anchored generally by discount department stores, grocery stores or drugstores. As of June 30, 2017, the Company had interests in 510 shopping center properties, including 84 million square feet of gross leasable area (GLA), located in 32 states, Puerto Rico and Canada. As of March 31, 2017, the Company had 380 other property interests, primarily through the Company’s preferred equity investments and other real estate investments, totaling 5.8 million square feet of GLA.

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