Agree Realty (NYSE:ADC) versus AGNC Investment (NASDAQ:AGNC) Critical Comparison

AGNC Investment (NASDAQ:AGNC) and Agree Realty (NYSE:ADC) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Analyst Ratings

This is a breakdown of recent ratings and target prices for AGNC Investment and Agree Realty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGNC Investment	0	3	7	0	2.70
Agree Realty	1	4	10	1	2.69

AGNC Investment currently has a consensus price target of $10.44, suggesting a potential upside of 10.45%. Agree Realty has a consensus price target of $78.03, suggesting a potential upside of 11.21%. Given Agree Realty’s higher probable upside, analysts clearly believe Agree Realty is more favorable than AGNC Investment.

Dividends

AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 15.2%. Agree Realty pays an annual dividend of $3.03 per share and has a dividend yield of 4.3%. AGNC Investment pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty pays out 167.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AGNC Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares AGNC Investment and Agree Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGNC Investment	42.19%	23.41%	2.14%
Agree Realty	31.62%	3.77%	2.39%

Volatility and Risk

AGNC Investment has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, Agree Realty has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Institutional & Insider Ownership

38.3% of AGNC Investment shares are owned by institutional investors. Comparatively, 97.8% of Agree Realty shares are owned by institutional investors. 0.5% of AGNC Investment shares are owned by company insiders. Comparatively, 1.8% of Agree Realty shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares AGNC Investment and Agree Realty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGNC Investment	$1.26 billion	6.65	$155.00 million	$1.44	6.56
Agree Realty	$600.53 million	12.10	$169.96 million	$1.81	38.77

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

Summary

Agree Realty beats AGNC Investment on 10 of the 17 factors compared between the two stocks.

About AGNC Investment

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).

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".