NRF Holdco (NYSE: NRF) and Federal Realty Investment Trust (NYSE:FRT) are both mid-cap financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.
Risk & Volatility
NRF Holdco has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.
69.7% of NRF Holdco shares are held by institutional investors. Comparatively, 93.5% of Federal Realty Investment Trust shares are held by institutional investors. 2.4% of NRF Holdco shares are held by company insiders. Comparatively, 1.1% of Federal Realty Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for NRF Holdco and Federal Realty Investment Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Federal Realty Investment Trust||1||2||9||0||2.67|
Federal Realty Investment Trust has a consensus target price of $135.91, indicating a potential upside of 16.84%. Given Federal Realty Investment Trust’s higher probable upside, analysts clearly believe Federal Realty Investment Trust is more favorable than NRF Holdco.
NRF Holdco pays an annual dividend of $1.60 per share and has a dividend yield of 9.9%. Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.4%. NRF Holdco pays out -88.9% of its earnings in the form of a dividend. Federal Realty Investment Trust pays out 100.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has increased its dividend for 50 consecutive years. NRF Holdco is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares NRF Holdco and Federal Realty Investment Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Federal Realty Investment Trust||$857.35 million||9.93||$289.91 million||$3.97||29.30|
Federal Realty Investment Trust has higher revenue and earnings than NRF Holdco. NRF Holdco is trading at a lower price-to-earnings ratio than Federal Realty Investment Trust, indicating that it is currently the more affordable of the two stocks.
This table compares NRF Holdco and Federal Realty Investment Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Federal Realty Investment Trust||33.81%||12.68%||4.52%|
Federal Realty Investment Trust beats NRF Holdco on 10 of the 14 factors compared between the two stocks.
NRF Holdco Company Profile
NRF Holdco LLC. is a commercial real estate company. The Company invests in multiple asset classes across commercial real estate (CRE). Its portfolio consists of healthcare, hotel, manufactured housing communities, net lease and multifamily properties. The Company also invests in other opportunistic real estate investments, such as indirect interests in real estate through its investments in private equity funds (PE Investments). The Company also acquires and operates hotel and certain healthcare properties. The Company’s segments include Real Estate, Commercial Real Estate Debt (CRE debt), Commercial Real Estate Securities, N-Star CDOs and Corporate. Its real estate equity investments that operate under the REIT Investment Diversification and Empowerment Act (RIDEA) structure generate resident and hotel guest related income from short-term residential agreements. The Company is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc.
Federal Realty Investment Trust Company Profile
Federal Realty Investment Trust is an equity real estate investment trust (REIT). The Company specializes in the ownership, management and redevelopment of retail and mixed-use properties located primarily in affluent communities in selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California and South Florida. As of December 31, 2016, the Company owned or had an interest in community and neighborhood shopping centers and mixed-use properties, which operated as 96 retail real estate projects and included approximately 22.6 million square feet. As of December 31, 2016, its 96 retail shopping center and mixed-use properties were located in 12 states and the District of Columbia. As of December 31, 2016, there were approximately 2,900 leases with tenants providing a range of retail products and services. These tenants range from sole proprietorships to national retailers, or corporate group of tenants.
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