Monmouth R.E. Inv. (NYSE: MNR) and NRF Holdco (NYSE:NRF) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Dividends

Monmouth R.E. Inv. pays an annual dividend of $0.68 per share and has a dividend yield of 4.2%. NRF Holdco pays an annual dividend of $1.60 per share and has a dividend yield of 9.9%. Monmouth R.E. Inv. 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. NRF Holdco pays out -88.9% of its earnings in the form of a dividend. NRF Holdco has raised its dividend for 3 consecutive years. NRF Holdco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Monmouth R.E. Inv. has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, NRF Holdco has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500.

Institutional & Insider Ownership

66.1% of Monmouth R.E. Inv. shares are held by institutional investors. Comparatively, 69.7% of NRF Holdco shares are held by institutional investors. 5.3% of Monmouth R.E. Inv. shares are held by insiders. Comparatively, 2.4% of NRF Holdco shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Monmouth R.E. Inv. and NRF Holdco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monmouth R.E. Inv. 30.84% 7.65% 2.58%
NRF Holdco -16.61% -17.86% -2.44%

Analyst Ratings

This is a summary of recent recommendations for Monmouth R.E. Inv. and NRF Holdco, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monmouth R.E. Inv. 0 1 4 0 2.80
NRF Holdco 0 0 0 0 N/A

Monmouth R.E. Inv. currently has a consensus price target of $17.80, suggesting a potential upside of 10.56%. Given Monmouth R.E. Inv.’s higher probable upside, analysts clearly believe Monmouth R.E. Inv. is more favorable than NRF Holdco.

Valuation and Earnings

This table compares Monmouth R.E. Inv. and NRF Holdco’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monmouth R.E. Inv. $97.66 million 12.62 $40.27 million $0.32 50.31
NRF Holdco N/A N/A N/A ($1.80) -8.96

Monmouth R.E. Inv. has higher revenue and earnings than NRF Holdco. NRF Holdco is trading at a lower price-to-earnings ratio than Monmouth R.E. Inv., indicating that it is currently the more affordable of the two stocks.

Summary

Monmouth R.E. Inv. beats NRF Holdco on 9 of the 14 factors compared between the two stocks.

Monmouth R.E. Inv. 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.

NRF Holdco Company Profile

NRF Holdco LLC. is a commercial real estate company. The Company invests in multiple asset classes across commercial real estate (CRE). Its portfolio consists of healthcare, hotel, manufactured housing communities, net lease and multifamily properties. The Company also invests in other opportunistic real estate investments, such as indirect interests in real estate through its investments in private equity funds (PE Investments). The Company also acquires and operates hotel and certain healthcare properties. The Company’s segments include Real Estate, Commercial Real Estate Debt (CRE debt), Commercial Real Estate Securities, N-Star CDOs and Corporate. Its real estate equity investments that operate under the REIT Investment Diversification and Empowerment Act (RIDEA) structure generate resident and hotel guest related income from short-term residential agreements. The Company is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc.

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