Liberty Property Trust (NYSE: LPT) and Federal Realty Investment Trust (NYSE:FRT) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
Volatility and Risk
Liberty Property Trust has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500.
Liberty Property Trust pays an annual dividend of $1.60 per share and has a dividend yield of 3.9%. Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.4%. Liberty Property Trust pays out 83.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust pays out 100.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Liberty Property Trust has increased its dividend for 3 consecutive years and Federal Realty Investment Trust has increased its dividend for 50 consecutive years. Liberty Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Liberty Property Trust and Federal Realty Investment Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Liberty Property Trust||37.90%||8.59%||4.24%|
|Federal Realty Investment Trust||33.81%||12.68%||4.52%|
Earnings & Valuation
This table compares Liberty Property Trust and Federal Realty Investment Trust’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Liberty Property Trust||$719.78 million||8.33||$282.34 million||$1.91||21.29|
|Federal Realty Investment Trust||$857.35 million||9.93||$289.91 million||$3.97||29.30|
Federal Realty Investment Trust has higher revenue and earnings than Liberty Property Trust. Liberty Property Trust is trading at a lower price-to-earnings ratio than Federal Realty Investment Trust, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
92.3% of Liberty Property Trust shares are held by institutional investors. Comparatively, 93.5% of Federal Realty Investment Trust shares are held by institutional investors. 1.5% of Liberty Property Trust shares are held by insiders. Comparatively, 1.1% of Federal Realty Investment Trust shares are held 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.
This is a summary of current recommendations and price targets for Liberty Property Trust and Federal Realty Investment Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty Property Trust||1||4||3||0||2.25|
|Federal Realty Investment Trust||1||2||9||0||2.67|
Liberty Property Trust presently has a consensus target price of $42.83, suggesting a potential upside of 5.32%. Federal Realty Investment Trust has a consensus target price of $135.91, suggesting a potential upside of 16.84%. Given Federal Realty Investment Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Federal Realty Investment Trust is more favorable than Liberty Property Trust.
Federal Realty Investment Trust beats Liberty Property Trust on 12 of the 17 factors compared between the two stocks.
About Liberty Property Trust
Liberty Property Trust (the Trust) is a self-administered and self-managed Maryland real estate investment trust (REIT). The Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership (the Operating Partnership). The Company’s segments include Carolinas/Richmond; Chicago/Milwaukee; Florida; Houston; Lehigh/Central PA; Minnesota; Philadelphia; Southeastern PA; United Kingdom, and Other, which includes Arizona; Atlanta; Cincinnati/Columbus/Indianapolis; Dallas; DC Metro; New Jersey; Southern California, and other. The Company owns and operates industrial properties nationally and owns and operates office properties in a focused group of office markets. Additionally, the Company owns certain assets in the United Kingdom. As of December 31, 2016, the Company owned and operated 450 industrial and 55 office properties totaling 86.0 million square feet.
About Federal Realty Investment Trust
Federal Realty Investment Trust is an equity real estate investment trust (REIT). The Company specializes in the ownership, management and redevelopment of retail and mixed-use properties located primarily in affluent communities in selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California and South Florida. As of December 31, 2016, the Company owned or had an interest in community and neighborhood shopping centers and mixed-use properties, which operated as 96 retail real estate projects and included approximately 22.6 million square feet. As of December 31, 2016, its 96 retail shopping center and mixed-use properties were located in 12 states and the District of Columbia. As of December 31, 2016, there were approximately 2,900 leases with tenants providing a range of retail products and services. These tenants range from sole proprietorships to national retailers, or corporate group of tenants.
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