Monmouth Real Estate Investment (NYSE: MNR) and Inland Real Estate (NYSE:IRC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

66.6% of Monmouth Real Estate Investment shares are held by institutional investors. 5.3% of Monmouth Real Estate Investment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Monmouth Real Estate Investment and Inland Real Estate, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monmouth Real Estate Investment 0 1 4 0 2.80
Inland Real Estate 0 0 0 0 N/A

Monmouth Real Estate Investment presently has a consensus target price of $17.50, suggesting a potential downside of 0.74%. Given Monmouth Real Estate Investment’s higher possible upside, equities analysts clearly believe Monmouth Real Estate Investment is more favorable than Inland Real Estate.

Earnings & Valuation

This table compares Monmouth Real Estate Investment and Inland Real Estate’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monmouth Real Estate Investment $97.66 million 13.82 $40.27 million $0.32 55.10
Inland Real Estate N/A N/A N/A $0.10 106.10

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

Dividends

Monmouth Real Estate Investment pays an annual dividend of $0.68 per share and has a dividend yield of 3.9%. Inland Real Estate pays an annual dividend of $0.57 per share and has a dividend yield of 5.4%. Monmouth Real Estate Investment pays out 212.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Inland Real Estate pays out 570.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Inland Real Estate has raised its dividend for 2 consecutive years. Inland Real Estate is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Monmouth Real Estate Investment and Inland Real Estate’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monmouth Real Estate Investment 30.84% 7.65% 2.58%
Inland Real Estate -0.49% -2.46% -0.06%

Summary

Monmouth Real Estate Investment beats Inland Real Estate on 10 of the 12 factors compared between the two stocks.

Monmouth Real Estate Investment Company Profile

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 property portfolio consists of approximately 109 properties located across 30 states, containing a total of approximately 18.9 million rentable square feet.

Inland Real Estate Company Profile

IRC Retail Centers, Inc., formerly Inland Real Estate Corporation, is a real estate investment trust (REIT). The Company owns, operates and develops open-air neighborhood, community and power shopping centers and single tenant retail properties located throughout the Central and Southeastern United States. Through its subsidiaries, Inland Commercial Property Management, Inc. (ICPM) and Inland TRS Property Management, Inc., the Company manages all properties it owns interests in and properties for certain third parties and related parties. The Company owns investment properties located in the States of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Minnesota, Missouri, Nebraska, New York, North Carolina, Ohio, Oklahoma, South Carolina, Texas, Virginia and Wisconsin. The Company owns interests in approximately 130 investment properties, including those owned through its unconsolidated joint ventures.

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