Analyzing AGNC Investment (NASDAQ:AGNC) and Agree Realty (NYSE:ADC)

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

Profitability

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

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

Analyst Recommendations

This is a summary of recent recommendations for Agree Realty and AGNC Investment, as provided by MarketBeat.

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

Agree Realty presently has a consensus price target of $78.03, indicating a potential upside of 11.21%. AGNC Investment has a consensus price target of $10.44, indicating a potential upside of 10.45%. Given Agree Realty’s higher probable upside, equities research analysts plainly believe Agree Realty is more favorable than AGNC Investment.

Volatility and Risk

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

Insider & Institutional Ownership

97.8% of Agree Realty shares are held by institutional investors. Comparatively, 38.3% of AGNC Investment shares are held by institutional investors. 1.8% of Agree Realty shares are held by company insiders. Comparatively, 0.5% of AGNC Investment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

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

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

Agree Realty has higher earnings, but lower revenue 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.

Dividends

Agree Realty pays an annual dividend of $3.03 per share and has a dividend yield of 4.3%. AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 15.2%. 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 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. AGNC Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

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

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".

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).