Financial Analysis: Saul Centers (BFS) versus AmREIT (AMRE)

AmREIT (NYSE: AMRE) and Saul Centers (NYSE:BFS) are both small-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.

Insider and Institutional Ownership

45.5% of Saul Centers shares are held by institutional investors. 48.8% of Saul Centers shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for AmREIT and Saul Centers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AmREIT 0 0 0 0 N/A
Saul Centers 0 0 1 0 3.00

Profitability

This table compares AmREIT and Saul Centers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AmREIT N/A N/A N/A
Saul Centers 21.42% 23.93% 3.44%

Earnings & Valuation

This table compares AmREIT and Saul Centers’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AmREIT N/A N/A N/A $0.24 110.63
Saul Centers $217.07 million 6.50 $45.27 million $1.63 39.52

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

Dividends

Saul Centers pays an annual dividend of $2.04 per share and has a dividend yield of 3.2%. AmREIT does not pay a dividend. Saul Centers pays out 125.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AmREIT has raised its dividend for 3 consecutive years.

Summary

Saul Centers beats AmREIT on 9 of the 11 factors compared between the two stocks.

About AmREIT

AmREIT, Inc. (AmREIT) is a full service, vertically integrated and self-administered real estate investment trust (REIT) that owns, operates, acquires and selectively develops and redevelops primarily neighborhood and community shopping centers located in high-traffic, densely populated, affluent areas with high barriers to entry. The Company’s shopping centers are anchored by national and local retailers, including supermarket chains, drug stores and other necessity-based retailers. In June 2013, AmREIT Inc announced that it has completed the acquisition of Fountain Oaks Shopping Center, a 160,600 square foot Kroger-anchored shopping center in the north Buckhead submarket of Atlanta, Georgia. Effective September 24, 2013, AmREIT Inc, through its AmREIT Realty Investment Corp subsidiary, acquired Woodlake Square Shopping Center, an owner and operator of shopping centers. In August 2014, AmREIT Inc completed the acquisition of Tuxedo Festival Shopping Center.

About Saul Centers

Saul Centers, Inc. operates as a real estate investment trust. The Company’s principal business activity is the ownership, management and development of income-producing properties. It operates through two segments: Shopping Centers and Mixed-Use Properties. The Company, which conducts all of its activities through its subsidiaries, the Saul Holdings Limited Partnership (Operating Partnership) and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-used properties in the Washington, District of Columbia/Baltimore metropolitan area. As of December 31, 2016, it properties (the Current Portfolio Properties) consisted of 49 shopping center properties (the Shopping Centers), six mixed-use properties, which consists of office, retail and multi-family residential uses (the Mixed-Use Properties) and three (non-operating) development properties.

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