Armada Hoffler Properties (NYSE: AHH) and Federal Realty Investment Trust (NYSE:FRT) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Risk and Volatility

Armada Hoffler Properties has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.29, meaning that its stock price is 71% less volatile than the S&P 500.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 5.8%. Federal Realty Investment Trust pays an annual dividend of $3.92 per share and has a dividend yield of 3.0%. Armada Hoffler Properties pays out 158.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust pays out 113.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Armada Hoffler Properties has increased its dividend for 49 consecutive years and Federal Realty Investment Trust has increased its dividend for 3 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

62.4% of Armada Hoffler Properties shares are held by institutional investors. Comparatively, 94.8% of Federal Realty Investment Trust shares are held by institutional investors. 20.9% of Armada Hoffler Properties 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, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Armada Hoffler Properties and Federal Realty Investment Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armada Hoffler Properties 0 2 3 0 2.60
Federal Realty Investment Trust 0 3 7 0 2.70

Armada Hoffler Properties currently has a consensus target price of $14.70, indicating a potential upside of 11.53%. Federal Realty Investment Trust has a consensus target price of $152.38, indicating a potential upside of 15.40%. Given Federal Realty Investment Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Federal Realty Investment Trust is more favorable than Armada Hoffler Properties.

Valuation & Earnings

This table compares Armada Hoffler Properties and Federal Realty Investment Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Armada Hoffler Properties $315.03 million 2.63 $65.61 million $0.48 27.46
Federal Realty Investment Trust $820.60 million 11.63 $526.36 million $3.45 38.27

Federal Realty Investment Trust has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler Properties 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.

Profitability

This table compares Armada Hoffler Properties and Federal Realty Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Armada Hoffler Properties 8.04% 7.02% 2.58%
Federal Realty Investment Trust 30.40% 10.91% 4.05%

Summary

Federal Realty Investment Trust beats Armada Hoffler Properties on 13 of the 17 factors compared between the two stocks.

Armada Hoffler Properties Company Profile

Armada Hoffler Properties, Inc. is a real estate company. The Company is engaged in developing, building, owning and managing institutional-grade office, retail and multifamily properties in various markets throughout the Mid-Atlantic and Southeastern United States. In addition to the ownership of its operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners. It also provides general contracting services to third parties. Its construction and development experience includes mid- and high-rise office buildings, retail strip malls and retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution and manufacturing facilities, educational, medical and special purpose facilities, government projects, parking garages and mixed-use town centers.

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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