Critical Review: Farmland Partners (NYSE:FPI) vs. American Healthcare REIT (NYSE:AHR)

American Healthcare REIT (NYSE:AHR) and Farmland Partners (NYSE:FPI) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Profitability

This table compares American Healthcare REIT and Farmland Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Healthcare REIT	1.21%	1.09%	0.58%
Farmland Partners	130.10%	14.37%	8.62%

Risk & Volatility

American Healthcare REIT has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Farmland Partners has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Institutional and Insider Ownership

16.7% of American Healthcare REIT shares are held by institutional investors. Comparatively, 58.0% of Farmland Partners shares are held by institutional investors. 1.0% of American Healthcare REIT shares are held by company insiders. Comparatively, 7.7% of Farmland Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for American Healthcare REIT and Farmland Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Healthcare REIT	0	3	10	1	2.86
Farmland Partners	0	1	0	0	2.00

American Healthcare REIT currently has a consensus price target of $51.64, indicating a potential upside of 8.54%. Given American Healthcare REIT’s stronger consensus rating and higher possible upside, analysts clearly believe American Healthcare REIT is more favorable than Farmland Partners.

Earnings and Valuation

This table compares American Healthcare REIT and Farmland Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Healthcare REIT	$2.07 billion	4.06	-$37.81 million	$0.14	339.80
Farmland Partners	$58.23 million	7.61	$59.91 million	$1.20	8.57

Farmland Partners has lower revenue, but higher earnings than American Healthcare REIT. Farmland Partners is trading at a lower price-to-earnings ratio than American Healthcare REIT, indicating that it is currently the more affordable of the two stocks.

Dividends

American Healthcare REIT pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Farmland Partners pays an annual dividend of $0.24 per share and has a dividend yield of 2.3%. American Healthcare REIT pays out 714.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Farmland Partners pays out 20.0% of its earnings in the form of a dividend. Farmland Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Farmland Partners beats American Healthcare REIT on 10 of the 17 factors compared between the two stocks.

About American Healthcare REIT

Formed by the successful merger of Griffin-American Healthcare REIT III and Griffin-American Healthcare REIT IV, as well as the acquisition of the business and operations of American Healthcare Investors, American Healthcare REIT is one of the larger healthcare-focused real estate investment trusts globally with assets totaling approximately $4.2 billion in gross investment value. The company benefits from a fully integrated management platform comprised of more than one hundred experienced and skilled professionals, many of whom have worked together since 2006 and have successfully invested in and managed healthcare real estate through multiple market cycles. The management team has a proven track record, deep industry relationships and unparalleled insight into each of the company's assets having built and nurtured the company's international portfolio since its original property acquisition in 2014. The strength of the management team, coupled with the quality of the assets, has American Healthcare REIT poised to capitalize on compelling growth driven by powerful demographic trends. With its 19 million-square-foot, 312-building portfolio of medical office buildings, senior housing communities, skilled nursing facilities and integrated senior health campuses diversified across 36 states and the United Kingdom, the tri-party transaction was a critical step in ideally positioning American Healthcare REIT for a future public listing or IPO on a national stock exchange at the most opportune time. By listing the company's shares on a national exchange, we believe the company will gain greater access to attractive capital that will fuel future growth, broaden our investor base and also provide liquidity to our fellow stockholders. American Healthcare REIT, Inc. operates as a subsidiary of Griffin Capital Company, LLC.

About Farmland Partners

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of December 31, 2023, the Company owns and/or manages approximately 171,100 acres in 16 states, including Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company has approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.