Agree Realty Corporation (NYSE: ADC) and Kite Realty Group Trust (NYSE:KRG) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Risk & Volatility

Agree Realty Corporation has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Kite Realty Group Trust has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Institutional and Insider Ownership

85.3% of Agree Realty Corporation shares are held by institutional investors. Comparatively, 95.7% of Kite Realty Group Trust shares are held by institutional investors. 4.4% of Agree Realty Corporation shares are held by insiders. Comparatively, 1.9% of Kite Realty Group Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Agree Realty Corporation pays an annual dividend of $2.02 per share and has a dividend yield of 4.1%. Kite Realty Group Trust pays an annual dividend of $1.21 per share and has a dividend yield of 6.0%. 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. Kite Realty Group Trust pays out 864.3% 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 increased its dividend for 3 consecutive years and Kite Realty Group Trust has increased its dividend for 4 consecutive years. Kite Realty Group Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Agree Realty Corporation and Kite Realty Group Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agree Realty Corporation 0 4 6 0 2.60
Kite Realty Group Trust 0 3 3 1 2.71

Agree Realty Corporation currently has a consensus target price of $51.88, suggesting a potential upside of 4.52%. Kite Realty Group Trust has a consensus target price of $26.00, suggesting a potential upside of 28.59%. Given Kite Realty Group Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Kite Realty Group Trust is more favorable than Agree Realty Corporation.

Profitability

This table compares Agree Realty Corporation and Kite Realty Group Trust’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%
Kite Realty Group Trust 3.29% 0.73% 0.33%

Valuation & Earnings

This table compares Agree Realty Corporation and Kite Realty Group Trust’s top-line 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
Kite Realty Group Trust $360.76 million 4.69 $224.39 million $0.14 144.43

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

Summary

Agree Realty Corporation beats Kite Realty Group Trust on 9 of the 17 factors compared between the two stocks.

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.

About Kite Realty Group Trust

Kite Realty Group Trust is a real estate investment trust. The Company, through its subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership, operation, acquisition, development and redevelopment of neighborhood and community shopping centers in selected markets in the United States. As of December 31, 2016, the Company owned interests in 108 operating retail properties totaling approximately 21.4 million square feet of gross leasable area (including approximately 6.3 million square feet of non-owned anchor space) located in 20 states. As of December 31, 2016, the Company had an interest in two development projects under construction. In addition to its development projects, as of December 31, 2016, the Company had nine redevelopment projects. As of December 31, 2016, the Company owned interests in one office operating property and an associated parking garage.

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