InfraREIT (NYSE: HIFR) is one of 16 publicly-traded companies in the “Specialized REITs” industry, but how does it contrast to its competitors? We will compare InfraREIT to similar companies based on the strength of its earnings, institutional ownership, dividends, profitability, analyst recommendations, valuation and risk.

Valuation and Earnings

This table compares InfraREIT and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
InfraREIT $184.70 million $160.52 million 18.53
InfraREIT Competitors $1.00 billion $531.02 million 28.19

InfraREIT’s competitors have higher revenue and earnings than InfraREIT. InfraREIT is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares InfraREIT and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InfraREIT 28.31% 6.28% 3.13%
InfraREIT Competitors 34.60% 8.74% 3.15%

Volatility & Risk

InfraREIT has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, InfraREIT’s competitors have a beta of 0.85, indicating that their average share price is 15% less volatile than the S&P 500.

Dividends

InfraREIT pays an annual dividend of $1.00 per share and has a dividend yield of 4.5%. InfraREIT pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Specialized REITs” companies pay a dividend yield of 4.3% and pay out 169.6% of their earnings in the form of a dividend. InfraREIT is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations and price targets for InfraREIT and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InfraREIT 0 2 1 0 2.33
InfraREIT Competitors 85 321 600 24 2.55

InfraREIT currently has a consensus target price of $22.00, indicating a potential downside of 1.03%. As a group, “Specialized REITs” companies have a potential upside of 14.08%. Given InfraREIT’s competitors stronger consensus rating and higher possible upside, analysts clearly believe InfraREIT has less favorable growth aspects than its competitors.

Insider & Institutional Ownership

83.8% of InfraREIT shares are held by institutional investors. Comparatively, 64.6% of shares of all “Specialized REITs” companies are held by institutional investors. 28.0% of InfraREIT shares are held by insiders. Comparatively, 6.4% of shares of all “Specialized REITs” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

InfraREIT competitors beat InfraREIT on 10 of the 14 factors compared.

About InfraREIT

InfraREIT, Inc. is a real estate investment trust. The Company is engaged in owning and leasing rate-regulated transmission and distribution (T&D) assets in Texas. It leases its T&D assets to Sharyland Utilities, L.P. Its assets are located in the Texas Panhandle near Amarillo, the Permian Basin in and around Stanton, Central Texas around Brady, Northeast Texas in and around Celeste and South Texas near McAllen. As of December 31, 2016, its T&D assets consisted of approximately 54,000 electricity delivery points, approximately 815 circuit miles of transmission lines, approximately 40,500 circuit miles of distribution lines, 57 substations and a 300 megawatt high-voltage direct current (DC) Tie between Texas and Mexico (Railroad DC Tie). As of December 31, 2016, its T&D assets in each of its leases included S/B/C Lease, McAllen Lease, competitive renewable energy zone (CREZ) Lease, Stanton Transmission Loop Lease and Electric Reliability Council of Texas (ERCOT) Transmission Lease.

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