First Industrial Realty Trust (NYSE: FR) and Stag Industrial (NYSE:STAG) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.
First Industrial Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 2.7%. Stag Industrial pays an annual dividend of $1.41 per share and has a dividend yield of 5.0%. First Industrial Realty Trust pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stag Industrial pays out 503.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Industrial Realty Trust has raised its dividend for 3 consecutive years and Stag Industrial has raised its dividend for 6 consecutive years. Stag Industrial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
92.4% of First Industrial Realty Trust shares are held by institutional investors. Comparatively, 81.3% of Stag Industrial shares are held by institutional investors. 1.8% of First Industrial Realty Trust shares are held by company insiders. Comparatively, 2.0% of Stag Industrial 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.
This is a breakdown of current recommendations for First Industrial Realty Trust and Stag Industrial, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Industrial Realty Trust||0||4||1||0||2.20|
First Industrial Realty Trust presently has a consensus target price of $30.25, indicating a potential downside of 2.98%. Stag Industrial has a consensus target price of $27.58, indicating a potential downside of 2.94%. Given Stag Industrial’s stronger consensus rating and higher probable upside, analysts plainly believe Stag Industrial is more favorable than First Industrial Realty Trust.
This table compares First Industrial Realty Trust and Stag Industrial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Industrial Realty Trust||29.91%||8.88%||4.12%|
Risk and Volatility
First Industrial Realty Trust has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Stag Industrial has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.
Valuation & Earnings
This table compares First Industrial Realty Trust and Stag Industrial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|First Industrial Realty Trust||$386.50 million||9.67||$253.02 million||$0.98||31.82|
|Stag Industrial||$270.80 million||9.68||$185.80 million||$0.28||101.50|
First Industrial Realty Trust has higher revenue and earnings than Stag Industrial. First Industrial Realty Trust is trading at a lower price-to-earnings ratio than Stag Industrial, indicating that it is currently the more affordable of the two stocks.
Stag Industrial beats First Industrial Realty Trust on 9 of the 17 factors compared between the two stocks.
First Industrial Realty Trust Company Profile
First Industrial Realty Trust, Inc. is a real estate investment trust (REIT). The Trust is a self-administered real estate company, which owns, manages, acquires, sells, develops and redevelops industrial real estate. As of December 31, 2016, the Company’s in-service portfolio consisted of 215 light industrial properties, 53 research and development (R&D)/flex properties, 167 bulk warehouse properties and 100 regional warehouse properties containing an aggregate of approximately 62.2 million square feet of gross leasable area (GLA) located in 23 states. The Company’s in-service portfolio includes all properties that have reached stabilized occupancy, developed and redeveloped properties and acquired properties that are occupied at acquisition or one year from the acquisition date. The Company’s operations are conducted primarily through the First Industrial, L.P. (the Operating Partnership), of which the Company is the sole general partner.
Stag Industrial Company Profile
STAG Industrial, Inc. is a real estate investment trust. The Company is focused on the acquisition, ownership, and operation of single-tenant, industrial properties across the United States. As of December 31, 2016, the Company owned 314 buildings in 37 states with approximately 60.9 million rentable square feet, consisting of 243 warehouse/distribution buildings, 54 light manufacturing buildings, 16 flex/office buildings, and one building in redevelopment. The Company owns all of its properties and conducts its business primarily through STAG Industrial Operating Partnership, L.P. (Operating Partnership). The Company invests in properties historically used for industrial, light manufacturing and commercial purposes. As of December 31, 2016, the Company’s properties were in various locations, such as Montgomery, Alabama; Rogers, Arkansas; Phoenix, Arizona; Sparks, Maryland; Camarillo, California, and Golden and Grand Junction in Colorado.
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