Comparing Armada Hoffler Properties (NYSE:AHRT) and Broadstone Net Lease (NYSE:BNL)

Broadstone Net Lease (NYSE:BNL) and Armada Hoffler Properties (NYSE:AHRT) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Broadstone Net Lease and Armada Hoffler Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadstone Net Lease	0	3	8	0	2.73
Armada Hoffler Properties	3	1	1	1	2.00

Broadstone Net Lease presently has a consensus target price of $20.22, indicating a potential upside of 9.14%. Armada Hoffler Properties has a consensus target price of $7.70, indicating a potential upside of 35.68%. Given Armada Hoffler Properties’ higher possible upside, analysts clearly believe Armada Hoffler Properties is more favorable than Broadstone Net Lease.

Valuation and Earnings

This table compares Broadstone Net Lease and Armada Hoffler Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadstone Net Lease	$454.14 million	7.81	$96.50 million	$0.50	37.06
Armada Hoffler Properties	$285.20 million	2.06	$5.60 million	($0.08)	-70.94

Broadstone Net Lease has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than Broadstone Net Lease, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

89.1% of Broadstone Net Lease shares are owned by institutional investors. Comparatively, 66.4% of Armada Hoffler Properties shares are owned by institutional investors. 0.6% of Broadstone Net Lease shares are owned by insiders. Comparatively, 11.9% of Armada Hoffler Properties shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Broadstone Net Lease pays an annual dividend of $1.17 per share and has a dividend yield of 6.3%. Armada Hoffler Properties pays an annual dividend of $0.56 per share and has a dividend yield of 9.9%. Broadstone Net Lease pays out 234.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Armada Hoffler Properties pays out -700.0% of its earnings in the form of a dividend. Broadstone Net Lease has increased its dividend for 4 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Broadstone Net Lease and Armada Hoffler Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadstone Net Lease	21.25%	3.17%	1.77%
Armada Hoffler Properties	0.95%	0.31%	0.08%

Risk & Volatility

Broadstone Net Lease has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Armada Hoffler Properties has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Summary

Broadstone Net Lease beats Armada Hoffler Properties on 12 of the 18 factors compared between the two stocks.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. (the “Company”) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to the ownership of the Company’s operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners and also invests in development projects through real estate financing arrangements. The Company also provides general construction and development services to third-party clients. The Company’s construction and development experience includes mid- and high-rise office buildings, retail strip malls, retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution, and manufacturing facilities, educational, medical, and special purpose facilities, government projects, parking garages, and mixed-use town centers. The Company is the sole general partner of Armada Hoffler, L.P. (the “Operating Partnership”) and, as of March 31, 2024, owned 75.5% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are conducted primarily through the Operating Partnership and the wholly owned subsidiaries thereof.