WP Carey (NYSE:WPC) and Federal Realty Investment Trust (NYSE:FRT) Financial Review

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

Valuation and Earnings

This table compares Federal Realty Investment Trust and WP Carey’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federal Realty Investment Trust $915.44 million 10.70 $241.90 million $6.23 20.83
WP Carey $885.73 million 15.86 $411.57 million $5.39 15.13

WP Carey has lower revenue, but higher earnings 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.

Dividends

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Federal Realty Investment Trust and WP Carey, as provided by MarketBeat.com.

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

Federal Realty Investment Trust currently has a consensus target price of $142.86, indicating a potential upside of 10.09%. WP Carey has a consensus target price of $79.75, indicating a potential downside of 2.20%. Given Federal Realty Investment Trust’s stronger consensus rating and higher probable upside, research analysts plainly believe Federal Realty Investment Trust is more favorable than WP Carey.

Profitability

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

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

Institutional and Insider Ownership

86.6% of Federal Realty Investment Trust shares are held by institutional investors. Comparatively, 57.8% of WP Carey shares are held by institutional investors. 0.8% of Federal Realty Investment Trust shares are held by company insiders. Comparatively, 1.1% of WP Carey shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

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

Summary

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

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.

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.

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