Head-To-Head Comparison: ARMOUR Residential REIT (ARR) and Four Corners Property Trust (FCPT)

ARMOUR Residential REIT (NYSE:ARR) and Four Corners Property Trust (NYSE:FCPT) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Dividends

ARMOUR Residential REIT pays an annual dividend of $2.28 per share and has a dividend yield of 10.7%. Four Corners Property Trust pays an annual dividend of $1.15 per share and has a dividend yield of 4.4%. ARMOUR Residential REIT pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Four Corners Property Trust pays out 84.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ARMOUR Residential REIT has raised its dividend for 4 consecutive years and Four Corners Property Trust has raised its dividend for 2 consecutive years. ARMOUR Residential REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares ARMOUR Residential REIT and Four Corners Property Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARMOUR Residential REIT $311.54 million 2.90 $181.15 million $2.62 8.15
Four Corners Property Trust $133.21 million 13.39 $71.39 million $1.36 19.35

ARMOUR Residential REIT has higher revenue and earnings than Four Corners Property Trust. ARMOUR Residential REIT is trading at a lower price-to-earnings ratio than Four Corners Property Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ARMOUR Residential REIT and Four Corners Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARMOUR Residential REIT 50.37% 9.85% 1.44%
Four Corners Property Trust 57.05% 13.21% 6.78%

Volatility & Risk

ARMOUR Residential REIT has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, Four Corners Property Trust has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for ARMOUR Residential REIT and Four Corners Property Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARMOUR Residential REIT 1 0 0 0 1.00
Four Corners Property Trust 0 1 1 0 2.50

ARMOUR Residential REIT currently has a consensus target price of $21.00, indicating a potential downside of 1.64%. Four Corners Property Trust has a consensus target price of $28.00, indicating a potential upside of 6.38%. Given Four Corners Property Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Four Corners Property Trust is more favorable than ARMOUR Residential REIT.

Institutional & Insider Ownership

59.7% of ARMOUR Residential REIT shares are owned by institutional investors. Comparatively, 91.1% of Four Corners Property Trust shares are owned by institutional investors. 1.6% of ARMOUR Residential REIT shares are owned by company insiders. Comparatively, 0.3% of Four Corners Property Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Four Corners Property Trust beats ARMOUR Residential REIT on 10 of the 17 factors compared between the two stocks.

About ARMOUR Residential REIT

ARMOUR Residential REIT, Inc. invests in residential mortgage backed securities in the United States. The company is managed by ARMOUR Capital Management LP. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable rate home loans, as well as unsecured notes and bonds issued by the GSE and the United States treasuries; and money market instruments. The company also invests in other securities backed by residential mortgages for which the payment of principal and interest is not guaranteed by a GSE or government agency. ARMOUR Residential REIT, Inc. has elected to be taxed as a real estate investment trust under the Internal Revenue Code. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 2008 and is based in Vero Beach, Florida.

About Four Corners Property Trust

FCPT is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease, on a net basis, for use in the restaurant and related food services industry.

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