Head-To-Head Survey: Agree Realty Corporation (ADC) vs. Washington Prime Group (WPG)

Agree Realty Corporation (NYSE: ADC) and Washington Prime Group (NYSE:WPG) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Volatility & Risk

Agree Realty Corporation has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Washington Prime Group has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Dividends

Agree Realty Corporation pays an annual dividend of $2.02 per share and has a dividend yield of 4.0%. Washington Prime Group pays an annual dividend of $1.00 per share and has a dividend yield of 11.8%. Agree Realty Corporation pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Washington Prime Group pays out 108.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Washington Prime Group has raised its dividend for 4 consecutive years. Washington Prime Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Agree Realty Corporation and Washington Prime Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agree Realty Corporation 54.22% 8.23% 4.91%
Washington Prime Group 22.65% 17.36% 3.73%

Institutional and Insider Ownership

86.9% of Agree Realty Corporation shares are owned by institutional investors. Comparatively, 92.0% of Washington Prime Group shares are owned by institutional investors. 4.4% of Agree Realty Corporation shares are owned by insiders. Comparatively, 0.3% of Washington Prime Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Agree Realty Corporation and Washington Prime Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Agree Realty Corporation $104.10 million 13.92 $84.76 million $2.23 22.88
Washington Prime Group $819.27 million 1.92 $487.39 million $0.92 9.22

Washington Prime Group has higher revenue and earnings than Agree Realty Corporation. Washington Prime Group is trading at a lower price-to-earnings ratio than Agree Realty Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Agree Realty Corporation and Washington Prime Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agree Realty Corporation 0 4 6 0 2.60
Washington Prime Group 1 0 0 0 1.00

Agree Realty Corporation presently has a consensus target price of $51.63, indicating a potential upside of 1.19%. Given Agree Realty Corporation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Agree Realty Corporation is more favorable than Washington Prime Group.

Summary

Agree Realty Corporation beats Washington Prime Group on 10 of the 17 factors compared between the two stocks.

Agree Realty Corporation Company Profile

Agree Realty Corporation (Agree Realty) is an integrated real estate investment trust (REIT) primarily focused on the ownership, acquisition, development and management of retail properties. The Company operates through Agree Limited Partnership (the Operating Partnership). As of December 31, 2016, its portfolio consisted of 366 properties located in 43 states and totaling approximately seven million square feet of gross leasable area (GLA). As of December 31, 2016, its portfolio included 363 net lease properties, which contributed approximately 98.1% of annualized base rent, and three community shopping centers. The Company’s business objective is to generate consistent shareholder returns by investing in and actively managing a diversified portfolio of retail properties net leased to industry tenants. Its community shopping centers include Capital Plaza, Frankfort; Central Michigan Commons, Mount Pleasant, and West Frankfort Plaza, West Frankfort.

Washington Prime Group Company Profile

Washington Prime Group Inc. (WPG Inc.), formerly WP Glimcher Inc., operates as a self-administered and self-managed real estate investment trust (REIT). The Company’s primary business is the ownership, development and management of retail real estate within the United States. The Company owns, develops and manages enclosed retail properties and community centers. As of December 31, 2016, its assets consisted of material interests in 114 shopping centers in the United States, consisting of approximately 63 million square feet of gross leasable area. The Company also owns parcels of land, which can be used for either the development of new shopping centers or the expansion of existing properties. Washington Prime Group, L.P. is the Company’s majority-owned partnership subsidiary that owns, develops and manages, through its affiliates, all of WPG Inc.’s real estate properties and other assets. Its properties include Irving Mall, Lindale Mall, Markland Plaza and Royal Eagle Plaza.

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