Analyzing Farmland Partners (NYSE:FPI) and One Liberty Properties (NYSE:OLP)

Farmland Partners (NYSE:FPIGet Rating) and One Liberty Properties (NYSE:OLPGet Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Institutional & Insider Ownership

46.5% of Farmland Partners shares are owned by institutional investors. Comparatively, 38.9% of One Liberty Properties shares are owned by institutional investors. 9.3% of Farmland Partners shares are owned by company insiders. Comparatively, 22.8% of One Liberty Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Farmland Partners and One Liberty Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmland Partners 30.30% 3.36% 1.60%
One Liberty Properties 46.51% 12.76% 5.22%

Dividends

Farmland Partners pays an annual dividend of $0.24 per share and has a dividend yield of 1.8%. One Liberty Properties pays an annual dividend of $1.80 per share and has a dividend yield of 7.8%. Farmland Partners pays out 126.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. One Liberty Properties pays out 96.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Farmland Partners has raised its dividend for 1 consecutive years. One Liberty Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Farmland Partners and One Liberty Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmland Partners 0 0 3 0 3.00
One Liberty Properties 0 0 1 0 3.00

Farmland Partners currently has a consensus target price of $16.25, suggesting a potential upside of 25.10%. One Liberty Properties has a consensus target price of $26.50, suggesting a potential upside of 14.47%. Given Farmland Partners’ higher possible upside, equities research analysts plainly believe Farmland Partners is more favorable than One Liberty Properties.

Risk and Volatility

Farmland Partners has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, One Liberty Properties has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Valuation & Earnings

This table compares Farmland Partners and One Liberty Properties’ top-line 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 13.70 $9.99 million $0.19 68.37
One Liberty Properties $82.74 million 5.90 $38.86 million $1.87 12.38

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

Summary

One Liberty Properties beats Farmland Partners on 10 of the 16 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 One Liberty Properties

(Get Rating)

One Liberty is a self-administered and self-managed real estate investment trust incorporated in Maryland in 1982. The Company acquires, owns and manages a geographically diversified portfolio consisting primarily of industrial, retail, restaurant, health and fitness and theater properties. Many of these properties are subject to long term net leases under which the tenant is typically responsible for the property's real estate taxes, insurance and ordinary maintenance and repairs.

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