Analyzing Farmland Partners (NYSE:FPI) and Annaly Capital Management (NYSE:NLY)

Farmland Partners (NYSE:FPIGet Rating) and Annaly Capital Management (NYSE:NLYGet Rating) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

42.5% of Farmland Partners shares are owned by institutional investors. Comparatively, 46.0% of Annaly Capital Management shares are owned by institutional investors. 13.6% of Farmland Partners shares are owned by insiders. Comparatively, 0.3% of Annaly Capital Management shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Farmland Partners and Annaly Capital Management’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Farmland Partners $51.74 million 14.82 $9.99 million $0.01 1,412.00
Annaly Capital Management $1.98 billion 4.81 $2.39 billion $2.52 2.33

Annaly Capital Management has higher revenue and earnings than Farmland Partners. Annaly Capital Management is trading at a lower price-to-earnings ratio than Farmland Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Farmland Partners and Annaly Capital Management, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmland Partners 0 0 3 0 3.00
Annaly Capital Management 0 4 2 0 2.33

Farmland Partners currently has a consensus target price of $15.75, indicating a potential upside of 11.54%. Annaly Capital Management has a consensus target price of $6.67, indicating a potential upside of 13.57%. Given Annaly Capital Management’s higher possible upside, analysts plainly believe Annaly Capital Management is more favorable than Farmland Partners.

Volatility and Risk

Farmland Partners has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Annaly Capital Management has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Dividends

Farmland Partners pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. Annaly Capital Management pays an annual dividend of $0.88 per share and has a dividend yield of 15.0%. Farmland Partners pays out 2,400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Annaly Capital Management pays out 34.9% of its earnings in the form of a dividend. Farmland Partners has raised its dividend for 1 consecutive years. Annaly Capital Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Farmland Partners and Annaly Capital Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmland Partners 25.47% 3.08% 1.29%
Annaly Capital Management 178.91% 16.72% 2.39%

Summary

Annaly Capital Management beats Farmland Partners on 11 of the 17 factors compared between the two stocks.

About Farmland Partners

(Get Rating)

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 the date of this release, the Company owns approximately 155,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have 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 Annaly Capital Management

(Get Rating)

Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance and corporate middle market lending. The company invests in agency mortgage-backed securities, mortgage servicing rights, Agency commercial mortgage-backed securities, non-Agency residential mortgage assets, residential mortgage loans, credit risk transfer securities, corporate debts, and other commercial real estate investments. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was founded in 1996 and is based in New York, New York.

Receive News & Ratings for Farmland Partners Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Farmland Partners and related companies with MarketBeat.com's FREE daily email newsletter.