Weyerhaeuser (NYSE:WY) and Farmland Partners (NYSE:FPI) Critical Contrast

Farmland Partners (NYSE:FPI) and Weyerhaeuser (NYSE:WY) are both real estate companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Volatility & Risk

Farmland Partners has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Weyerhaeuser has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Valuation & Earnings

This table compares Farmland Partners and Weyerhaeuser”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmland Partners	$52.18 million	7.24	$31.55 million	$0.15	59.97
Weyerhaeuser	$6.91 billion	2.17	$324.00 million	$0.62	33.59

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Farmland Partners and Weyerhaeuser, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmland Partners	0	4	0	0	2.00
Weyerhaeuser	1	1	8	1	2.82

Weyerhaeuser has a consensus target price of $26.10, indicating a potential upside of 25.33%. Given Weyerhaeuser’s stronger consensus rating and higher probable upside, analysts clearly believe Weyerhaeuser is more favorable than Farmland Partners.

Dividends

Farmland Partners pays an annual dividend of $0.36 per share and has a dividend yield of 4.0%. Weyerhaeuser pays an annual dividend of $0.84 per share and has a dividend yield of 4.0%. Farmland Partners pays out 240.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Weyerhaeuser pays out 135.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Weyerhaeuser has increased its dividend for 3 consecutive years. Weyerhaeuser is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

58.0% of Farmland Partners shares are owned by institutional investors. Comparatively, 83.0% of Weyerhaeuser shares are owned by institutional investors. 7.9% of Farmland Partners shares are owned by company insiders. Comparatively, 0.3% of Weyerhaeuser 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 Weyerhaeuser’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmland Partners	19.47%	2.14%	1.38%
Weyerhaeuser	6.47%	1.72%	0.98%

Summary

Weyerhaeuser beats Farmland Partners on 13 of the 18 factors compared between the two stocks.

About Farmland Partners

Farmland Partners Inc. is a real estate investment trust that owns and manages U.S. farmland. It leases properties to farmers who grow a range of crops, with a portfolio that includes both row-crop and specialty-crop farms across major agricultural regions. The company’s business also includes providing loans secured by farmland through its FPI Finance subsidiary. These activities give Farmland Partners exposure to agricultural real estate while serving farmers and other participants in the agriculture sector.

About Weyerhaeuser

Weyerhaeuser is a timber, land and wood-products company founded in 1900 and headquartered in Seattle. It owns and manages timberlands in the United States and holds long-term forest-management licenses in Canada. The company grows and harvests timber and manufactures wood products, including lumber, engineered wood products, oriented strand board and plywood. These materials are used in residential construction, remodeling and other building applications. Weyerhaeuser also manages its timberlands for real estate, energy and other natural-resource opportunities.