Critical Survey: American Assets Trust (NYSE:AAT) & Agree Realty (NYSE:ADC)

American Assets Trust (NYSE:AAT) and Agree Realty (NYSE:ADC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Insider & Institutional Ownership

90.4% of American Assets Trust shares are held by institutional investors. Comparatively, 97.8% of Agree Realty shares are held by institutional investors. 36.8% of American Assets Trust shares are held by insiders. Comparatively, 1.8% of Agree Realty shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares American Assets Trust and Agree Realty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Assets Trust	$439.58 million	2.69	$72.82 million	$1.01	19.14
Agree Realty	$688.64 million	12.25	$189.20 million	$1.71	42.92

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

Profitability

This table compares American Assets Trust and Agree Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Assets Trust	13.98%	5.43%	2.03%
Agree Realty	28.11%	3.52%	2.16%

Dividends

American Assets Trust pays an annual dividend of $1.36 per share and has a dividend yield of 7.0%. Agree Realty pays an annual dividend of $3.14 per share and has a dividend yield of 4.3%. American Assets Trust pays out 134.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty pays out 183.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Assets Trust has increased its dividend for 4 consecutive years and Agree Realty has increased its dividend for 1 consecutive years. American Assets Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

American Assets Trust has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Agree Realty has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for American Assets Trust and Agree Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Assets Trust	0	3	0	0	2.00
Agree Realty	0	7	9	0	2.56

American Assets Trust presently has a consensus target price of $20.50, suggesting a potential upside of 6.06%. Agree Realty has a consensus target price of $80.73, suggesting a potential upside of 10.01%. Given Agree Realty’s stronger consensus rating and higher possible upside, analysts plainly believe Agree Realty is more favorable than American Assets Trust.

Summary

Agree Realty beats American Assets Trust on 11 of the 17 factors compared between the two stocks.

About American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.

About Agree Realty

Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of December 31, 2023, the Company owned and operated a portfolio of 2,135 properties, located in 49 states and containing approximately 44.2 million square feet of gross leasable area. The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC".