Comparing RMR Group (RMR) and Farmland Partners (FPI)
RMR Group (NASDAQ: RMR) and Farmland Partners (NYSE:FPI) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.
Risk and Volatility
RMR Group has a beta of -0.11, meaning that its share price is 111% less volatile than the S&P 500. Comparatively, Farmland Partners has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for RMR Group and Farmland Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
RMR Group currently has a consensus price target of $60.00, suggesting a potential downside of 14.47%. Farmland Partners has a consensus price target of $9.15, suggesting a potential upside of 10.11%. Given Farmland Partners’ higher probable upside, analysts plainly believe Farmland Partners is more favorable than RMR Group.
RMR Group pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. Farmland Partners pays an annual dividend of $0.51 per share and has a dividend yield of 6.1%. RMR Group pays out 18.0% of its earnings in the form of a dividend. Farmland Partners pays out -5,100,000.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Farmland Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
17.9% of RMR Group shares are owned by institutional investors. Comparatively, 50.1% of Farmland Partners shares are owned by institutional investors. 14.8% of RMR Group shares are owned by company insiders. Comparatively, 2.8% of Farmland Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares RMR Group and Farmland Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|RMR Group||$271.73 million||8.04||$42.29 million||$5.56||12.62|
|Farmland Partners||$46.22 million||5.45||$7.91 million||$0.00||-831,000.00|
RMR Group has higher revenue and earnings than Farmland Partners. Farmland Partners is trading at a lower price-to-earnings ratio than RMR Group, indicating that it is currently the more affordable of the two stocks.
This table compares RMR Group and Farmland Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
RMR Group beats Farmland Partners on 10 of the 15 factors compared between the two stocks.
RMR Group Company Profile
The RMR Group Inc. is a holding company. The Company’s business is primarily conducted by its subsidiary, The RMR Group LLC (RMR LLC). The Company’s segments include RMR LLC and All Other Operations. RMR LLC manages a portfolio of publicly owned real estate and real estate related businesses. RMR LLC manages Government Properties Income Trust, a real estate investment trust (REIT) that primarily owns properties that are leased to government tenants; Hospitality Properties Trust, an REIT that primarily owns hotels and travel centers; Select Income REIT, an REIT that primarily owns properties leased to single tenants across the United States and leased lands in Hawaii, and Senior Housing Properties Trust, an REIT that primarily owns senior living communities and medical office buildings. As of June 30, 2016, RMR LLC managed over 1,300 properties, which were located in 48 states, Washington, District of Columbia, Puerto Rico and Canada.
Farmland Partners Company Profile
Farmland Partners, Inc. is an internally managed real estate company. The Company owns and seeks to acquire farmland located in agricultural markets throughout North America. The Company is the sole member of the general partner of Farmland Partners Operating Partnership, LP (the Operating Partnership). All of the Company’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the subsidiaries of the Operating Partnership. The Company’s principal investment focus is on farmland located in agricultural markets throughout North America, however, it may seek to acquire farmland outside of North America. It also may acquire properties related to farming, such as grain storage facilities, grain elevators, feedlots, cold storage facilities, processing plants and distribution centers, as well as livestock farms or ranches. As of December 31, 2016, the Company owned approximately 115,489 acres, as well as eight grain storage facilities.
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