Critical Comparison: Retail Opportunity Investments (NASDAQ:ROIC) versus Monmouth R.E. Inv. (NASDAQ:MNR)

Retail Opportunity Investments (NASDAQ:ROIC) and Monmouth R.E. Inv. (NYSE:MNR) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Institutional and Insider Ownership

94.4% of Retail Opportunity Investments shares are owned by institutional investors. Comparatively, 70.6% of Monmouth R.E. Inv. shares are owned by institutional investors. 2.5% of Retail Opportunity Investments shares are owned by company insiders. Comparatively, 3.9% of Monmouth R.E. Inv. shares are owned 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.

Profitability

This table compares Retail Opportunity Investments and Monmouth R.E. Inv.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Retail Opportunity Investments 15.53% 3.50% 1.51%
Monmouth R.E. Inv. 1.56% 0.41% 0.14%

Analyst Recommendations

This is a breakdown of current ratings for Retail Opportunity Investments and Monmouth R.E. Inv., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Retail Opportunity Investments 0 5 4 0 2.44
Monmouth R.E. Inv. 1 1 1 0 2.00

Retail Opportunity Investments presently has a consensus target price of $12.81, indicating a potential upside of 22.37%. Monmouth R.E. Inv. has a consensus target price of $14.67, indicating a potential upside of 3.14%. Given Retail Opportunity Investments’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Retail Opportunity Investments is more favorable than Monmouth R.E. Inv..

Valuation and Earnings

This table compares Retail Opportunity Investments and Monmouth R.E. Inv.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Retail Opportunity Investments $295.04 million 4.18 $48.84 million $1.10 9.52
Monmouth R.E. Inv. $158.52 million 8.79 $29.80 million $0.85 16.73

Retail Opportunity Investments has higher revenue and earnings than Monmouth R.E. Inv.. Retail Opportunity Investments is trading at a lower price-to-earnings ratio than Monmouth R.E. Inv., indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Retail Opportunity Investments has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Monmouth R.E. Inv. has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

Summary

Retail Opportunity Investments beats Monmouth R.E. Inv. on 12 of the 14 factors compared between the two stocks.

Retail Opportunity Investments Company Profile

Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely-populated, metropolitan markets across the West Coast. As of June 30, 2020, ROIC owned 88 shopping centers encompassing approximately 10.1 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services and Standard & Poor's.

Monmouth R.E. Inv. Company Profile

Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the world. We specialize in single tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants. Monmouth Real Estate is a fully integrated and self-managed real estate company, whose property portfolio consists of 113 properties containing a total of approximately 21.8 million rentable square feet, geographically diversified across 30 states. In addition, we own a portfolio of REIT securities.

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