Critical Review: SBA Communications (NASDAQ:SBAC) and First Industrial Realty Trust (NYSE:FR)

SBA Communications (NASDAQ:SBAC) and First Industrial Realty Trust (NYSE:FR) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares SBA Communications and First Industrial Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SBA Communications	35.66%	-20.90%	8.98%
First Industrial Realty Trust	47.97%	12.99%	6.41%

Volatility and Risk

SBA Communications has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, First Industrial Realty Trust has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Dividends

SBA Communications pays an annual dividend of $5.00 per share and has a dividend yield of 2.7%. First Industrial Realty Trust pays an annual dividend of $2.00 per share and has a dividend yield of 3.0%. SBA Communications pays out 52.6% of its earnings in the form of a dividend. First Industrial Realty Trust pays out 73.0% 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. SBA Communications has increased its dividend for 6 consecutive years and First Industrial Realty Trust has increased its dividend for 12 consecutive years. First Industrial Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for SBA Communications and First Industrial Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SBA Communications	0	8	9	1	2.61
First Industrial Realty Trust	0	7	7	1	2.60

SBA Communications currently has a consensus target price of $235.28, indicating a potential upside of 29.34%. First Industrial Realty Trust has a consensus target price of $66.21, indicating a potential upside of 0.48%. Given SBA Communications’ stronger consensus rating and higher probable upside, analysts plainly believe SBA Communications is more favorable than First Industrial Realty Trust.

Institutional and Insider Ownership

97.3% of SBA Communications shares are owned by institutional investors. Comparatively, 99.8% of First Industrial Realty Trust shares are owned by institutional investors. 9.5% of SBA Communications shares are owned by company insiders. Comparatively, 1.1% of First Industrial Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares SBA Communications and First Industrial Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SBA Communications	$2.82 billion	6.85	$1.05 billion	$9.50	19.15
First Industrial Realty Trust	$727.08 million	12.02	$247.44 million	$2.74	24.05

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

Summary

SBA Communications beats First Industrial Realty Trust on 9 of the 17 factors compared between the two stocks.

About SBA Communications

SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 39,000 communications sites throughout the Americas, Africa and in Asia, SBA is listed on NASDAQ under the symbol SBAC. Our organization is part of the S&P 500 and is one of the top Real Estate Investment Trusts (REITs) by market capitalization.

About First Industrial Realty Trust

First Industrial Realty Trust, Inc. (NYSE: FR) is a leading U.S.-only owner, operator, developer and acquirer of logistics properties. Through our fully integrated operating and investing platform, we provide high quality facilities and industry-leading customer service to multinational corporations and regional firms that are essential for their supply chains. Our portfolio and new investments are concentrated in 15 target MSAs with an emphasis on supply-constrained, coastally oriented markets. In total, we own and have under development approximately 68.5 million square feet of industrial space as of December 31, 2023.