Financial Analysis: Federal Realty Investment Trust (FRT) vs. Its Rivals

Federal Realty Investment Trust (NYSE: FRT) is one of 87 public companies in the “Commercial REITs” industry, but how does it contrast to its rivals? We will compare Federal Realty Investment Trust to similar companies based on the strength of its analyst recommendations, earnings, profitability, institutional ownership, risk, valuation and dividends.

Institutional & Insider Ownership

93.5% of Federal Realty Investment Trust shares are owned by institutional investors. Comparatively, 69.5% of shares of all “Commercial REITs” companies are owned by institutional investors. 1.1% of Federal Realty Investment Trust shares are owned by company insiders. Comparatively, 9.0% of shares of all “Commercial REITs” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Federal Realty Investment Trust has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust’s rivals have a beta of 0.80, meaning that their average share price is 20% less volatile than the S&P 500.

Dividends

Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.3%. Federal Realty Investment Trust pays out 115.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 4.0% and pay out 216.2% of their earnings in the form of a dividend. Federal Realty Investment Trust has increased its dividend for 49 consecutive years.

Analyst Ratings

This is a summary of recent ratings and price targets for Federal Realty Investment Trust and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Realty Investment Trust 1 2 7 0 2.60
Federal Realty Investment Trust Competitors 638 2518 2187 23 2.30

Federal Realty Investment Trust currently has a consensus price target of $140.25, suggesting a potential upside of 15.48%. As a group, “Commercial REITs” companies have a potential upside of 8.45%. Given Federal Realty Investment Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe Federal Realty Investment Trust is more favorable than its rivals.

Earnings and Valuation

This table compares Federal Realty Investment Trust and its rivals gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Federal Realty Investment Trust $820.60 million $526.36 million 35.20
Federal Realty Investment Trust Competitors $457.04 million $289.32 million 35.97

Federal Realty Investment Trust has higher revenue and earnings than its rivals. Federal Realty Investment Trust is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Federal Realty Investment Trust and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federal Realty Investment Trust 30.40% 10.91% 4.05%
Federal Realty Investment Trust Competitors 52.03% 6.52% 3.81%

Summary

Federal Realty Investment Trust beats its rivals on 9 of the 15 factors compared.

Federal Realty Investment Trust Company Profile

Federal Realty Investment Trust is an equity real estate investment trust (REIT). The Company specializes in the ownership, management and redevelopment of retail and mixed-use properties located primarily in affluent communities in selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California and South Florida. As of December 31, 2016, the Company owned or had an interest in community and neighborhood shopping centers and mixed-use properties, which operated as 96 retail real estate projects and included approximately 22.6 million square feet. As of December 31, 2016, its 96 retail shopping center and mixed-use properties were located in 12 states and the District of Columbia. As of December 31, 2016, there were approximately 2,900 leases with tenants providing a range of retail products and services. These tenants range from sole proprietorships to national retailers, or corporate group of tenants.

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