Head to Head Contrast: Starwood Property Trust (NYSE:STWD) versus Agree Realty (NYSE:ADC)

Starwood Property Trust (NYSE:STWD) and Agree Realty (NYSE:ADC) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Volatility and Risk

Starwood Property Trust has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Agree Realty has a beta of -0.01, meaning that its share price is 101% less volatile than the S&P 500.

Dividends

Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 7.8%. Agree Realty pays an annual dividend of $2.28 per share and has a dividend yield of 3.0%. Starwood Property Trust pays out 91.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

60.8% of Starwood Property Trust shares are held by institutional investors. 3.1% of Starwood Property Trust shares are held by insiders. Comparatively, 3.1% of Agree Realty shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Starwood Property Trust and Agree Realty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Starwood Property Trust 34.61% 10.49% 0.72%
Agree Realty 40.18% 5.16% 3.14%

Valuation and Earnings

This table compares Starwood Property Trust and Agree Realty’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Starwood Property Trust $1.11 billion 6.23 $385.83 million $2.11 11.61
Agree Realty $148.20 million 21.40 $58.17 million $2.85 26.24

Starwood Property Trust has higher revenue and earnings than Agree Realty. Starwood Property Trust is trading at a lower price-to-earnings ratio than Agree Realty, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Starwood Property Trust and Agree Realty, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starwood Property Trust 0 0 3 0 3.00
Agree Realty 0 2 3 1 2.83

Starwood Property Trust presently has a consensus target price of $25.83, indicating a potential upside of 5.44%. Agree Realty has a consensus target price of $74.60, indicating a potential downside of 0.24%. Given Starwood Property Trust’s stronger consensus rating and higher probable upside, research analysts clearly believe Starwood Property Trust is more favorable than Agree Realty.

Summary

Starwood Property Trust beats Agree Realty on 8 of the 15 factors compared between the two stocks.

Starwood Property Trust Company Profile

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and Europe. It operates through three segments: Real Estate Lending, Real Estate Property, and Real Estate Investing and Servicing. The Real Estate Lending segment originates, acquires, finances, and manages commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, residential mortgage loans, and other real estate and real estate-related debt investments. The Real Estate Property segment acquires and manages equity interests in commercial real estate properties, including multi-family properties. The Real Estate Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS, including subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was founded in 2009 and is headquartered in Greenwich, Connecticut.

Agree Realty Company Profile

Agree Realty Corporation is a publicly traded real estate investment trust primarily engaged in the acquisition and development of properties net leased to industry-leading retail tenants. As of March 31, 2019, the Company owned and operated a portfolio of 694 properties, located in 46 states and containing approximately 11.9 million square feet of gross leasable space. The common stock of Agree Realty Corporation is listed on the New York Stock Exchange under the symbol "ADC".

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