Financial Comparison: Armada Hoffler Properties (NYSE:AHRT) and Essential Properties Realty Trust (NYSE:EPRT)

Armada Hoffler Properties (NYSE:AHRT) and Essential Properties Realty Trust (NYSE:EPRT) are both real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Analyst Ratings

This is a summary of current ratings and target prices for Armada Hoffler Properties and Essential Properties Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Armada Hoffler Properties	1	2	1	1	2.40
Essential Properties Realty Trust	0	0	11	1	3.08

Armada Hoffler Properties currently has a consensus price target of $7.50, indicating a potential upside of 26.80%. Essential Properties Realty Trust has a consensus price target of $35.75, indicating a potential upside of 34.70%. Given Essential Properties Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Essential Properties Realty Trust is more favorable than Armada Hoffler Properties.

Profitability

This table compares Armada Hoffler Properties and Essential Properties Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Armada Hoffler Properties	-18.23%	-0.79%	-0.20%
Essential Properties Realty Trust	43.51%	6.34%	3.81%

Institutional and Insider Ownership

66.3% of Armada Hoffler Properties shares are owned by institutional investors. Comparatively, 97.0% of Essential Properties Realty Trust shares are owned by institutional investors. 9.3% of Armada Hoffler Properties shares are owned by insiders. Comparatively, 0.8% of Essential Properties Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.56 per share and has a dividend yield of 9.5%. Essential Properties Realty Trust pays an annual dividend of $1.28 per share and has a dividend yield of 4.8%. Armada Hoffler Properties pays out -88.9% of its earnings in the form of a dividend. Essential Properties Realty Trust pays out 99.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Essential Properties Realty Trust has raised its dividend for 6 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Armada Hoffler Properties and Essential Properties Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Armada Hoffler Properties	$285.20 million	1.55	$5.60 million	($0.63)	-9.39
Essential Properties Realty Trust	$615.49 million	9.33	$253.01 million	$1.29	20.57

Essential Properties Realty Trust has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than Essential Properties Realty Trust, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Armada Hoffler Properties has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Essential Properties Realty Trust has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Summary

Essential Properties Realty Trust beats Armada Hoffler Properties on 13 of the 17 factors compared between the two stocks.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. (the “Company”) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to the ownership of the Company’s operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners and also invests in development projects through real estate financing arrangements. The Company also provides general construction and development services to third-party clients. The Company’s construction and development experience includes mid- and high-rise office buildings, retail strip malls, retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution, and manufacturing facilities, educational, medical, and special purpose facilities, government projects, parking garages, and mixed-use town centers. The Company is the sole general partner of Armada Hoffler, L.P. (the “Operating Partnership”) and, as of March 31, 2024, owned 75.5% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are conducted primarily through the Operating Partnership and the wholly owned subsidiaries thereof.

About Essential Properties Realty Trust

Essential Properties Realty Trust, Inc., a real estate company, acquires, owns, and manages single-tenant properties in the United States. The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical and dental services, convenience stores, equipment rental, entertainment, early childhood education, grocery, and health and fitness on a long-term basis. As of December 31, 2021, it had a portfolio of 1, 451 properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2016 and is headquartered in Princeton, New Jersey.