Monmouth R.E. Inv. (NYSE:MNR) and InfraREIT (NYSE:HIFR) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Dividends

Monmouth R.E. Inv. pays an annual dividend of $0.68 per share and has a dividend yield of 5.1%. InfraREIT pays an annual dividend of $1.00 per share and has a dividend yield of 4.8%. Monmouth R.E. Inv. pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Monmouth R.E. Inv. has increased its dividend for 4 consecutive years. Monmouth R.E. Inv. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Monmouth R.E. Inv. has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, InfraREIT has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Earnings & Valuation

This table compares Monmouth R.E. Inv. and InfraREIT’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monmouth R.E. Inv. $139.37 million 8.95 $56.00 million $0.87 15.40
InfraREIT $200.35 million 4.61 $61.67 million N/A N/A

InfraREIT has higher revenue and earnings than Monmouth R.E. Inv..

Institutional & Insider Ownership

68.1% of Monmouth R.E. Inv. shares are held by institutional investors. Comparatively, 85.8% of InfraREIT shares are held by institutional investors. 4.0% of Monmouth R.E. Inv. shares are held by company insiders. Comparatively, 26.7% of InfraREIT shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Monmouth R.E. Inv. and InfraREIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monmouth R.E. Inv. 1.33% 0.27% 0.12%
InfraREIT 30.78% 8.15% 3.71%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Monmouth R.E. Inv. and InfraREIT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monmouth R.E. Inv. 0 3 2 0 2.40
InfraREIT 0 1 0 0 2.00

Monmouth R.E. Inv. currently has a consensus target price of $16.20, indicating a potential upside of 20.90%. InfraREIT has a consensus target price of $21.00, indicating a potential downside of 0.05%. Given Monmouth R.E. Inv.’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Monmouth R.E. Inv. is more favorable than InfraREIT.

Summary

InfraREIT beats Monmouth R.E. Inv. on 8 of the 15 factors compared between the two stocks.

About Monmouth R.E. Inv.

Monmouth Real Estate Investment Corp. engages in the ownership and management of real estate. It invests in single tenant, industrial buildings leased primarily to investment-grade tenants on long-term net leases. The company was founded by Eugene W. Landy in 1968 and is headquartered in Freehold, NJ.

About InfraREIT

InfraREIT is engaged in owning and leasing rate-regulated electric transmission assets in the state of Texas and is structured as a real estate investment trust. The Company is externally managed by Hunt Utility Services, LLC, an affiliate of Hunt Consolidated, Inc. (a diversified holding company based in Dallas, Texas, and managed by the Ray L. Hunt family). The Company's shares are traded on the New York Stock Exchange under the symbol “HIFR.”

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