Monmouth Real Estate Investment Corporation (NYSE: MNR) and Armada Hoffler Properties (NYSE:AHH) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Dividends

Monmouth Real Estate Investment Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 4.0%. Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 5.6%. Monmouth Real Estate Investment Corporation pays out 213.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Monmouth Real Estate Investment Corporation has increased its dividend for 2 consecutive years and Armada Hoffler Properties 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.

Institutional & Insider Ownership

60.6% of Monmouth Real Estate Investment Corporation shares are owned by institutional investors. Comparatively, 81.4% of Armada Hoffler Properties shares are owned by institutional investors. 5.3% of Monmouth Real Estate Investment Corporation shares are owned by company insiders. Comparatively, 20.9% of Armada Hoffler Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Monmouth Real Estate Investment Corporation and Armada Hoffler Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monmouth Real Estate Investment Corporation 32.02% 7.91% 2.69%
Armada Hoffler Properties 8.04% 7.02% 2.58%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Monmouth Real Estate Investment Corporation and Armada Hoffler Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monmouth Real Estate Investment Corporation 0 1 3 0 2.75
Armada Hoffler Properties 0 2 4 0 2.67

Monmouth Real Estate Investment Corporation currently has a consensus price target of $16.75, suggesting a potential upside of 3.40%. Armada Hoffler Properties has a consensus price target of $14.75, suggesting a potential upside of 8.38%. Given Armada Hoffler Properties’ higher probable upside, analysts plainly believe Armada Hoffler Properties is more favorable than Monmouth Real Estate Investment Corporation.

Volatility & Risk

Monmouth Real Estate Investment Corporation has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500. Comparatively, Armada Hoffler Properties has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Earnings & Valuation

This table compares Monmouth Real Estate Investment Corporation and Armada Hoffler Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Monmouth Real Estate Investment Corporation $108.67 million 11.08 $82.64 million $0.30 54.00
Armada Hoffler Properties $315.03 million 2.71 $65.61 million $0.48 28.35

Monmouth Real Estate Investment Corporation has higher revenue, but lower earnings than Armada Hoffler Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than Monmouth Real Estate Investment Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Armada Hoffler Properties beats Monmouth Real Estate Investment Corporation on 10 of the 17 factors compared between the two stocks.

About Monmouth Real Estate Investment Corporation

Monmouth Real Estate Investment Corporation is a real estate investment trust (REIT). The Company’s primary business is the ownership of real estate. Its investment focus is to own single tenant, industrial buildings and leased to investment-grade tenants or their subsidiaries on long-term net leases. In addition, the Company owns a portfolio of REIT investment securities. Its assets are situated near airports, transportation hubs and manufacturing plants. The Company’s featured properties include ULTA Cosmetics, Milwaukee Tool, Beam Suntory, FedEx Supply Chain Services, Coca-Cola, Best Buy, International Paper, Home Depot, FedEx Ground, Actavis, Anheuser-Busch, United Technologies, Kellogg’s, Siemens, National Oilwell and Cardinal Health. The Company’s property portfolio consists of approximately 105 properties located in over 30 states, containing a total of approximately 17.9 million rentable square feet.

About Armada Hoffler Properties

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.

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