Critical Survey: Broadstone Net Lease (NYSE:BNL) versus United Development Funding IV (OTCMKTS:UDFI)

United Development Funding IV (OTCMKTS:UDFI) and Broadstone Net Lease (NYSE:BNL) are both real estate companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Institutional and Insider Ownership

89.1% of Broadstone Net Lease shares are held by institutional investors. 0.5% of United Development Funding IV shares are held by insiders. Comparatively, 1.0% of Broadstone Net Lease shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares United Development Funding IV and Broadstone Net Lease”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Development Funding IV	N/A	N/A	N/A	N/A	N/A
Broadstone Net Lease	$454.14 million	9.10	$96.50 million	$0.76	28.35

Broadstone Net Lease has higher revenue and earnings than United Development Funding IV.

Profitability

This table compares United Development Funding IV and Broadstone Net Lease’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Development Funding IV	N/A	N/A	N/A
Broadstone Net Lease	30.61%	4.83%	2.54%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for United Development Funding IV and Broadstone Net Lease, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Development Funding IV	0	0	0	0	0.00
Broadstone Net Lease	0	4	7	0	2.64

Broadstone Net Lease has a consensus target price of $22.78, suggesting a potential upside of 5.72%. Given Broadstone Net Lease’s stronger consensus rating and higher possible upside, analysts clearly believe Broadstone Net Lease is more favorable than United Development Funding IV.

Summary

Broadstone Net Lease beats United Development Funding IV on 9 of the 9 factors compared between the two stocks.

About United Development Funding IV

United Development Funding IV invests in secured loans for the acquisition and development of land into single-family home lots, and the construction of model and new single-family homes. It also makes equity investments in residential real estate. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. United Development Funding IV was founded in 2008 and is headquartered in Grapevine, Texas.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.