Head to Head Analysis: TPG RE Finance Trust (NYSE:TRTX) and Agree Realty (NYSE:ADC)

Agree Realty (NYSE:ADC) and TPG RE Finance Trust (NYSE:TRTX) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Agree Realty and TPG RE Finance Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Agree Realty	0	2	11	1	2.93
TPG RE Finance Trust	1	0	5	0	2.67

Agree Realty currently has a consensus target price of $78.18, indicating a potential upside of 4.71%. TPG RE Finance Trust has a consensus target price of $9.08, indicating a potential upside of 0.59%. Given Agree Realty’s stronger consensus rating and higher probable upside, research analysts clearly believe Agree Realty is more favorable than TPG RE Finance Trust.

Institutional and Insider Ownership

97.8% of Agree Realty shares are owned by institutional investors. Comparatively, 57.1% of TPG RE Finance Trust shares are owned by institutional investors. 1.8% of Agree Realty shares are owned by company insiders. Comparatively, 2.5% of TPG RE Finance Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Agree Realty and TPG RE Finance Trust”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	12.87	$169.96 million	$1.81	41.25
TPG RE Finance Trust	$390.25 million	1.87	-$116.63 million	$0.69	13.09

Agree Realty has higher revenue and earnings than TPG RE Finance Trust. TPG RE Finance 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.

Risk & Volatility

Agree Realty has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, TPG RE Finance Trust has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500.

Dividends

Agree Realty pays an annual dividend of $3.03 per share and has a dividend yield of 4.1%. TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 10.6%. 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. TPG RE Finance Trust pays out 139.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG RE Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Agree Realty and TPG RE Finance Trust’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%
TPG RE Finance Trust	19.65%	-7.50%	-2.19%

Summary

Agree Realty beats TPG RE Finance Trust on 13 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 TPG RE Finance Trust

TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.