Critical Analysis: Farmland Partners (NYSE:FPI) vs. Healthcare Realty Trust (NYSE:HR)

Farmland Partners (NYSE:FPI) and Healthcare Realty Trust (NYSE:HR) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Profitability

This table compares Farmland Partners and Healthcare Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmland Partners	60.46%	6.67%	4.14%
Healthcare Realty Trust	-20.84%	-5.07%	-2.47%

Valuation and Earnings

This table compares Farmland Partners and Healthcare Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmland Partners	$52.18 million	10.40	$31.55 million	$0.60	20.77
Healthcare Realty Trust	$1.18 billion	5.43	-$246.07 million	($0.71)	-25.89

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

Institutional and Insider Ownership

58.0% of Farmland Partners shares are held by institutional investors. 8.3% of Farmland Partners shares are held by company insiders. Comparatively, 0.4% of Healthcare Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Farmland Partners and Healthcare Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmland Partners	0	2	0	0	2.00
Healthcare Realty Trust	1	6	3	0	2.20

Healthcare Realty Trust has a consensus price target of $18.88, suggesting a potential upside of 2.69%. Given Healthcare Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Healthcare Realty Trust is more favorable than Farmland Partners.

Risk and Volatility

Farmland Partners has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Healthcare Realty Trust has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Dividends

Farmland Partners pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. Healthcare Realty Trust pays an annual dividend of $0.96 per share and has a dividend yield of 5.2%. Farmland Partners pays out 40.0% of its earnings in the form of a dividend. Healthcare Realty Trust pays out -135.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Healthcare Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Farmland Partners beats Healthcare Realty Trust on 9 of the 16 factors compared between the two stocks.

About Farmland Partners

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of December 31, 2023, the Company owns and/or manages approximately 171,100 acres in 16 states, including Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company has approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.

About Healthcare Realty Trust

Healthcare Realty Trust, Inc. provides real estate investment services. It owns, leases, manages, acquires, finances, develops, and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States of America. The company was founded by David R. Emery in 1992 and is headquartered in Nashville, TN.