Comparing Essential Properties Realty Trust (NYSE:EPRT) & ARMOUR Residential REIT (NYSE:ARR)

ARMOUR Residential REIT (NYSE:ARRGet Free Report) and Essential Properties Realty Trust (NYSE:EPRTGet Free Report) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Dividends

ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 14.9%. Essential Properties Realty Trust pays an annual dividend of $1.14 per share and has a dividend yield of 4.2%. ARMOUR Residential REIT pays out -400.0% of its earnings in the form of a dividend. Essential Properties Realty Trust pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Essential Properties Realty Trust has raised its dividend for 5 consecutive years. ARMOUR Residential REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares ARMOUR Residential REIT and Essential Properties Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARMOUR Residential REIT -3.83% 15.68% 1.55%
Essential Properties Realty Trust 51.34% 6.56% 4.19%

Earnings and Valuation

This table compares ARMOUR Residential REIT and Essential Properties Realty Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARMOUR Residential REIT $552.90 million 1.70 -$67.92 million ($0.72) -26.76
Essential Properties Realty Trust $359.60 million 13.38 $190.71 million $1.23 22.31

Essential Properties Realty Trust has lower revenue, but higher earnings than ARMOUR Residential REIT. ARMOUR Residential REIT is trading at a lower price-to-earnings ratio than Essential Properties Realty Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ARMOUR Residential REIT and Essential Properties Realty Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARMOUR Residential REIT 0 3 0 0 2.00
Essential Properties Realty Trust 0 0 9 0 3.00

ARMOUR Residential REIT presently has a consensus price target of $19.25, suggesting a potential downside of 0.08%. Essential Properties Realty Trust has a consensus price target of $28.56, suggesting a potential upside of 4.07%. Given Essential Properties Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Essential Properties Realty Trust is more favorable than ARMOUR Residential REIT.

Risk and Volatility

ARMOUR Residential REIT has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, Essential Properties Realty Trust has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Institutional and Insider Ownership

54.2% of ARMOUR Residential REIT shares are owned by institutional investors. Comparatively, 97.0% of Essential Properties Realty Trust shares are owned by institutional investors. 0.4% of ARMOUR Residential REIT shares are owned by insiders. Comparatively, 0.8% of Essential Properties Realty Trust shares are owned by 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.

Summary

Essential Properties Realty Trust beats ARMOUR Residential REIT on 12 of the 17 factors compared between the two stocks.

About ARMOUR Residential REIT

(Get Free Report)

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.

About Essential Properties Realty Trust

(Get Free Report)

Essential Properties Realty Trust, Inc., a real estate company, acquires, owns, and manages single-tenant properties in the United States. The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical and dental services, convenience stores, equipment rental, entertainment, early childhood education, grocery, and health and fitness on a long-term basis. As of December 31, 2021, it had a portfolio of 1, 451 properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2016 and is headquartered in Princeton, New Jersey.

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