Agree Realty (NYSE:ADC) vs. Getty Realty (NYSE:GTY) Critical Analysis

Agree Realty (NYSE:ADC) and Getty Realty (NYSE:GTY) are both real estate companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Dividends

Agree Realty pays an annual dividend of $3.25 per share and has a dividend yield of 4.6%. Getty Realty pays an annual dividend of $1.94 per share and has a dividend yield of 6.7%. Agree Realty pays out 167.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Getty Realty pays out 118.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty has raised its dividend for 1 consecutive years and Getty Realty has raised its dividend for 1 consecutive years. Getty Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

97.8% of Agree Realty shares are held by institutional investors. Comparatively, 85.1% of Getty Realty shares are held by institutional investors. 1.8% of Agree Realty shares are held by company insiders. Comparatively, 7.5% of Getty Realty shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Agree Realty and Getty Realty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Agree Realty	$718.40 million	12.73	$204.35 million	$1.94	36.24
Getty Realty	$221.73 million	8.75	$79.19 million	$1.64	17.63

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

Analyst Recommendations

This is a summary of current ratings for Agree Realty and Getty Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Agree Realty	0	6	10	1	2.71
Getty Realty	0	4	3	1	2.62

Agree Realty currently has a consensus target price of $79.85, suggesting a potential upside of 13.58%. Getty Realty has a consensus target price of $36.57, suggesting a potential upside of 26.50%. Given Getty Realty’s higher probable upside, analysts clearly believe Getty Realty is more favorable than Agree Realty.

Volatility and Risk

Agree Realty has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Getty Realty has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares Agree Realty and Getty Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Agree Realty	29.75%	4.00%	2.43%
Getty Realty	42.37%	8.93%	4.42%

About Agree Realty

Agree Realty Corporation is a real estate investment trust (REIT) focused on acquiring, developing and managing net-leased properties, primarily occupied by retail businesses. Its portfolio includes freestanding stores and other properties leased to national and regional retailers. Under net leases, tenants generally assume responsibility for property expenses such as taxes, insurance and maintenance, while Agree Realty owns the real estate and collects rent. The company’s properties are located across the United States.

About Getty Realty

Getty Realty Corp. is a real estate investment trust that owns and leases properties used for convenience and automotive retail businesses. Its portfolio includes gas stations, convenience stores, car washes, and automotive service centers. The company generally leases its properties to operators under long-term net leases. Tenants run their businesses and are typically responsible for property-related expenses, while Getty focuses on owning and managing the real estate. Getty Realty’s properties are located across the United States.