Analyzing WP Carey (NYSE:WPC) & Federal Realty Investment Trust (NYSE:FRT)

WP Carey (NYSE:WPC) and Federal Realty Investment Trust (NYSE:FRT) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Risk and Volatility

WP Carey has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500.

Insider and Institutional Ownership

57.8% of WP Carey shares are owned by institutional investors. Comparatively, 86.6% of Federal Realty Investment Trust shares are owned by institutional investors. 1.1% of WP Carey shares are owned by insiders. Comparatively, 0.8% of Federal Realty Investment Trust shares are owned 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 WP Carey and Federal Realty Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WP Carey 30.89% 5.31% 2.61%
Federal Realty Investment Trust 28.01% 11.09% 4.07%

Dividends

WP Carey pays an annual dividend of $4.14 per share and has a dividend yield of 5.1%. Federal Realty Investment Trust pays an annual dividend of $4.20 per share and has a dividend yield of 3.2%. WP Carey pays out 76.8% 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 67.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings for WP Carey and Federal Realty Investment Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WP Carey 0 5 1 0 2.17
Federal Realty Investment Trust 0 3 6 0 2.67

WP Carey presently has a consensus target price of $79.75, indicating a potential downside of 2.42%. Federal Realty Investment Trust has a consensus target price of $142.86, indicating a potential upside of 8.91%. Given Federal Realty Investment Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Federal Realty Investment Trust is more favorable than WP Carey.

Valuation & Earnings

This table compares WP Carey 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
WP Carey $885.73 million 15.90 $411.57 million $5.39 15.16
Federal Realty Investment Trust $915.44 million 10.82 $241.90 million $6.23 21.05

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

Summary

Federal Realty Investment Trust beats WP Carey on 11 of the 16 factors compared between the two stocks.

WP Carey Company Profile

W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $17 billion and a diversified portfolio of operationally-critical commercial real estate that includes 1,163 net lease properties covering approximately 131 million square feet. For over four decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term leases with built-in rent escalators. Its portfolio is located primarily in the U.S. and Northern and Western Europe and is well-diversified by tenant, property type, geographic location and tenant industry.

Federal Realty Investment Trust Company Profile

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 105 properties include approximately 3,000 tenants, in 24 million square feet, and over 2,600 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 51 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT.

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