PS Business Parks (NYSE:PSB) and Agree Realty (NYSE:ADC) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.
PS Business Parks pays an annual dividend of $4.20 per share and has a dividend yield of 3.1%. Agree Realty pays an annual dividend of $2.16 per share and has a dividend yield of 3.7%. PS Business Parks pays out 68.5% of its earnings in the form of a dividend. Agree Realty pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks has increased its dividend for 4 consecutive years and Agree Realty has increased its dividend for 5 consecutive years. Agree Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares PS Business Parks and Agree Realty’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PS Business Parks||$402.18 million||9.33||$155.03 million||$6.13||22.38|
|Agree Realty||$116.56 million||17.43||$58.11 million||$2.72||21.66|
PS Business Parks has higher revenue and earnings than Agree Realty. Agree Realty is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.
This table compares PS Business Parks and Agree Realty’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|PS Business Parks||53.92%||22.57%||10.77%|
Volatility & Risk
PS Business Parks has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Agree Realty has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500.
Insider & Institutional Ownership
71.3% of PS Business Parks shares are owned by institutional investors. Comparatively, 90.9% of Agree Realty shares are owned by institutional investors. 1.6% of PS Business Parks shares are owned by insiders. Comparatively, 3.7% of Agree Realty shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a summary of current ratings and recommmendations for PS Business Parks and Agree Realty, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|PS Business Parks||1||2||0||0||1.67|
PS Business Parks presently has a consensus target price of $120.00, suggesting a potential downside of 12.54%. Agree Realty has a consensus target price of $58.00, suggesting a potential downside of 1.56%. Given Agree Realty’s stronger consensus rating and higher probable upside, analysts plainly believe Agree Realty is more favorable than PS Business Parks.
PS Business Parks beats Agree Realty on 9 of the 17 factors compared between the two stocks.
About PS Business Parks
PS Business Parks, Inc., a member of the S&P SmallCap 600, is a real estate investment trust (REIT) that acquires, develops, owns and operates commercial properties, primarily multi-tenant industrial, flex and office space. As of June 30, 2018, the Company wholly owned 28.3 million rentable square feet with approximately 5,000 commercial customers in six states and a 95.0% interest in a 395-unit apartment complex.
About Agree Realty
Agree Realty Corporation is a publicly traded real estate investment trust primarily engaged in the acquisition and development of properties net leased to industry-leading retail tenants. As of June 30, 2018, the Company owned and operated a portfolio of 481 properties, located in 44 states and containing approximately 9.3 million square feet of gross leasable space. The common stock of Agree Realty Corporation is listed on the New York Stock Exchange under the symbol "ADC".
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