Analyzing Essential Properties Realty Trust (NYSE:EPRT) and Federal Realty Investment Trust (NYSE:FRT)

Federal Realty Investment Trust (NYSE:FRT) and Essential Properties Realty Trust (NYSE:EPRT) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Federal Realty Investment Trust	27.65%	11.12%	4.01%
Essential Properties Realty Trust	45.25%	6.38%	3.88%

Volatility & Risk

Federal Realty Investment Trust has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Essential Properties Realty Trust has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Dividends

Federal Realty Investment Trust pays an annual dividend of $4.52 per share and has a dividend yield of 4.7%. Essential Properties Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. Federal Realty Investment Trust pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Essential Properties Realty Trust pays out 96.8% 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 has raised its dividend for 58 consecutive years and Essential Properties Realty Trust has raised its dividend for 6 consecutive years. Federal Realty Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings for Federal Realty Investment Trust and Essential Properties Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Realty Investment Trust	0	10	5	1	2.44
Essential Properties Realty Trust	0	2	11	0	2.85

Federal Realty Investment Trust currently has a consensus target price of $108.25, indicating a potential upside of 11.52%. Essential Properties Realty Trust has a consensus target price of $35.54, indicating a potential upside of 14.45%. Given Essential Properties Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Essential Properties Realty Trust is more favorable than Federal Realty Investment Trust.

Insider and Institutional Ownership

93.9% of Federal Realty Investment Trust shares are held by institutional investors. Comparatively, 97.0% of Essential Properties Realty Trust shares are held by institutional investors. 1.0% of Federal Realty Investment Trust shares are held by company insiders. Comparatively, 0.8% of Essential Properties Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Federal Realty Investment Trust and Essential Properties Realty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Realty Investment Trust	$1.20 billion	6.96	$295.21 million	$3.94	24.64
Essential Properties Realty Trust	$449.61 million	13.69	$203.00 million	$1.24	25.04

Federal Realty Investment Trust has higher revenue and earnings than Essential Properties Realty Trust. Federal Realty Investment Trust 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.

Summary

Federal Realty Investment Trust beats Essential Properties Realty Trust on 10 of the 18 factors compared between the two stocks.

About Federal Realty Investment Trust

Federal Realty Investment Trust is an equity real estate investment trust, which engages in the provision of ownership, management, and redevelopment of retail and mixed-use properties located primarily in communities where demand exceeds supply in strategically selected metropolitan markets. The company was founded in 1962 and is headquartered in North Bethesda, MD.

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.