Financial Contrast: Farmland Partners (NYSE:FPI) & Independence Realty Trust (NYSE:IRT)

Farmland Partners (NYSE:FPI) and Independence Realty Trust (NYSE:IRT) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.

Volatility and Risk

Farmland Partners has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Independence Realty Trust has a beta of 1.07, meaning that its share price is 7% 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 2.2%. Independence Realty Trust pays an annual dividend of $0.64 per share and has a dividend yield of 4.1%. Farmland Partners pays out 46.2% of its earnings in the form of a dividend. Independence Realty Trust pays out -914.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Independence Realty Trust has raised its dividend for 2 consecutive years. Independence Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Farmland Partners and Independence Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmland Partners	53.80%	5.70%	2.83%
Independence Realty Trust	-2.61%	-0.47%	-0.27%

Valuation and Earnings

This table compares Farmland Partners and Independence Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmland Partners	$57.47 million	9.09	$30.91 million	$0.52	20.87
Independence Realty Trust	$660.98 million	5.33	-$17.23 million	($0.07)	-223.75

Farmland Partners has higher earnings, but lower revenue than Independence Realty Trust. Independence Realty Trust is trading at a lower price-to-earnings ratio than Farmland Partners, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

58.0% of Farmland Partners shares are owned by institutional investors. Comparatively, 88.3% of Independence Realty Trust shares are owned by institutional investors. 9.5% of Farmland Partners shares are owned by company insiders. Comparatively, 0.7% of Independence Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Farmland Partners and Independence Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmland Partners	0	0	2	0	3.00
Independence Realty Trust	1	0	4	0	2.60

Farmland Partners presently has a consensus target price of $15.00, suggesting a potential upside of 38.25%. Independence Realty Trust has a consensus target price of $17.00, suggesting a potential upside of 8.52%. Given Farmland Partners’ stronger consensus rating and higher probable upside, equities analysts plainly believe Farmland Partners is more favorable than Independence Realty Trust.

Summary

Farmland Partners beats Independence Realty Trust on 10 of the 17 factors compared between the two stocks.

About Farmland Partners

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 December 31, 2023, the Company owns and/or manages approximately 171,100 acres in 16 states, including Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company has 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 Independence Realty Trust

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT's investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.