Spirit Realty Capital (NYSE: FCE.A) and Forest City Realty Trust (NYSE:FCE.A) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.
This table compares Spirit Realty Capital and Forest City Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Spirit Realty Capital||14.77%||3.42%||1.54%|
|Forest City Realty Trust||40.28%||N/A||N/A|
Spirit Realty Capital pays an annual dividend of $0.72 per share and has a dividend yield of 8.5%. Forest City Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 2.9%. Spirit Realty Capital pays out 84.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spirit Realty Capital has increased its dividend for 3 consecutive years. Spirit Realty Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and target prices for Spirit Realty Capital and Forest City Realty Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Spirit Realty Capital||0||7||5||0||2.42|
|Forest City Realty Trust||0||0||1||0||3.00|
Spirit Realty Capital presently has a consensus price target of $9.03, suggesting a potential upside of 6.88%. Forest City Realty Trust has a consensus price target of $25.00, suggesting a potential downside of 0.20%. Given Spirit Realty Capital’s higher probable upside, research analysts clearly believe Spirit Realty Capital is more favorable than Forest City Realty Trust.
Insider & Institutional Ownership
93.1% of Spirit Realty Capital shares are owned by institutional investors. Comparatively, 87.8% of Forest City Realty Trust shares are owned by institutional investors. 0.5% of Spirit Realty Capital shares are owned by insiders. Comparatively, 9.2% of Forest City Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
Spirit Realty Capital has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Forest City Realty Trust has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.
Earnings and Valuation
This table compares Spirit Realty Capital and Forest City Realty Trust’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Spirit Realty Capital||$668.96 million||5.41||$77.14 million||$0.85||9.94|
|Forest City Realty Trust||$911.90 million||7.34||$206.03 million||N/A||N/A|
Forest City Realty Trust has higher revenue and earnings than Spirit Realty Capital.
Forest City Realty Trust beats Spirit Realty Capital on 9 of the 16 factors compared between the two stocks.
About Spirit Realty Capital
Spirit Realty Capital, Inc. (NYSE: SRC) is a premier net-lease real estate investment trust (REIT) that primarily invests in high-quality, operationally essential real estate, subject to long-term, net leases. Over the past decade, Spirit has become an industry leader and owner of income-producing, strategically located retail, industrial and office properties providing superior risk adjusted returns and steady dividend growth for our stockholders. As of March 31, 2018, our diversified portfolio was comprised of 2,446 properties, including properties securing mortgage loans made by the Company. Our properties, with an aggregate gross leasable area of approximately 48.3 million square feet, are leased to approximately 417 tenants across 49 states and 32 industries. More information about Spirit Realty Capital can be found on the investor relations page of the Company's website at www.spiritrealty.com.
About Forest City Realty Trust
Forest City Realty Trust, Inc. is engaged in operation, development, management and acquisition of office, retail and apartment real estate and land throughout the United States. The Company’s segments include Office, Retail, Apartments, Development, Corporate and Other. Its Office segment owns, acquires and operates office and life science buildings. Its Retail segment owns, acquires and operates regional malls, specialty/urban retail centers and amenity retail within its mixed-use projects. Its Apartments segment owns, acquires and operates rental properties, including upscale and middle-market apartments, adaptive reuse developments and subsidized senior housing. Its Development segment represents the development and construction of office and life science buildings, regional malls, specialty/urban retail centers, amenity retail, apartments, condominiums and mixed-use projects.
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