Equity One (NYSE: EQY) and Federal Realty Investment Trust (NYSE:FRT) are both mid-cap commercial reits – nec companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Insider and Institutional Ownership

64.0% of Equity One shares are held by institutional investors. Comparatively, 94.7% of Federal Realty Investment Trust shares are held by institutional investors. 35.9% of Equity One shares are held by insiders. Comparatively, 1.1% of Federal Realty Investment Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Equity One has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500.

Dividends

Equity One pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.0%. Equity One pays out 146.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust pays out 97.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has raised its dividend for 49 consecutive years. Federal Realty Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Equity One and Federal Realty Investment Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity One 0 0 0 0 N/A
Federal Realty Investment Trust 1 2 8 0 2.64

Federal Realty Investment Trust has a consensus target price of $140.80, suggesting a potential upside of 6.67%. Given Federal Realty Investment Trust’s higher probable upside, analysts plainly believe Federal Realty Investment Trust is more favorable than Equity One.

Valuation and Earnings

This table compares Equity One and Federal Realty Investment Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity One N/A N/A N/A $0.49 62.96
Federal Realty Investment Trust $801.59 million 11.95 $249.91 million $4.10 32.20

Federal Realty Investment Trust has higher revenue and earnings than Equity One. Federal Realty Investment Trust is trading at a lower price-to-earnings ratio than Equity One, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Equity One and Federal Realty Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity One 18.64% 3.82% 2.05%
Federal Realty Investment Trust 35.50% 13.28% 4.82%

Summary

Federal Realty Investment Trust beats Equity One on 11 of the 13 factors compared between the two stocks.

Equity One Company Profile

Equity One, Inc. is a real estate investment trust (REIT). The Company owns, manages, acquires, develops and redevelops shopping centers and retail properties located in supply constrained suburban and urban communities. As of December 31, 2016, the Company’s portfolio consisted of 122 properties, including 101 retail properties and five non-retail properties totaling approximately 12.8 million square feet of gross leasable area (GLA), 10 development or redevelopment properties with approximately 2.3 million square feet of GLA, and six land parcels. Its retail occupancy excluding developments and redevelopments was 95.8% and included national, regional and local tenants as of December 31, 2016. In addition, the Company had joint venture interests in six retail properties and two office buildings totaling approximately 1.4 million square feet of GLA as of December 31, 2016.

Federal Realty Investment Trust Company Profile

Federal Realty Investment Trust is an equity real estate investment trust (REIT). The Company specializes in the ownership, management and redevelopment of retail and mixed-use properties located primarily in affluent communities in selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California and South Florida. As of December 31, 2016, the Company owned or had an interest in community and neighborhood shopping centers and mixed-use properties, which operated as 96 retail real estate projects and included approximately 22.6 million square feet. As of December 31, 2016, its 96 retail shopping center and mixed-use properties were located in 12 states and the District of Columbia. As of December 31, 2016, there were approximately 2,900 leases with tenants providing a range of retail products and services. These tenants range from sole proprietorships to national retailers, or corporate group of tenants.

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