Farmland Partners (NYSE:FPI) vs. Simon Property Group (NYSE:SPG) Critical Review

Farmland Partners (NYSE:FPI) and Simon Property Group (NYSE:SPG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Profitability

This table compares Farmland Partners and Simon Property Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmland Partners	31.68%	3.53%	1.80%
Simon Property Group	43.36%	76.21%	7.61%

Earnings and Valuation

This table compares Farmland Partners and Simon Property Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmland Partners	$58.34 million	10.17	$30.91 million	$0.28	44.00
Simon Property Group	$5.91 billion	9.48	$2.28 billion	$7.51	22.85

Simon Property Group has higher revenue and earnings than Farmland Partners. Simon Property Group is trading at a lower price-to-earnings ratio than Farmland Partners, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

58.0% of Farmland Partners shares are owned by institutional investors. Comparatively, 93.0% of Simon Property Group shares are owned by institutional investors. 8.3% of Farmland Partners shares are owned by insiders. Comparatively, 8.5% of Simon Property Group shares are owned by 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.

Dividends

Farmland Partners pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. Simon Property Group pays an annual dividend of $8.40 per share and has a dividend yield of 4.9%. Farmland Partners pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simon Property Group pays out 111.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current recommendations for Farmland Partners and Simon Property Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmland Partners	0	0	2	0	3.00
Simon Property Group	0	7	2	0	2.22

Farmland Partners presently has a consensus target price of $15.00, indicating a potential upside of 21.75%. Simon Property Group has a consensus target price of $169.22, indicating a potential downside of 1.39%. Given Farmland Partners’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Farmland Partners is more favorable than Simon Property Group.

Volatility & Risk

Farmland Partners has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Simon Property Group has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Summary

Simon Property Group beats Farmland Partners on 10 of the 15 factors compared between the two stocks.

About Farmland Partners

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of December 31, 2023, the Company owns and/or manages approximately 171,100 acres in 16 states, including Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company has approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.

About Simon Property Group

Simon Property Group, Inc. (NYSE:SPG) is a self-administered and self-managed real estate investment trust (REIT). Simon Property Group, L.P., or the Operating Partnership, is our majority-owned partnership subsidiary that owns all of our real estate properties and other assets. In this package, the terms Simon, we, our, or the Company refer to Simon Property Group, Inc., the Operating Partnership, and its subsidiaries. We own, develop and manage premier shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets, The Mills, and International Properties. At June 30, 2024, we owned or had an interest in 230 properties comprising 183 million square feet in North America, Asia and Europe. We also owned an 84% interest in The Taubman Realty Group, or TRG, which owns 22 regional, super-regional, and outlet malls in the U.S. and Asia. Additionally, at June 30, 2024, we had a 22.4% ownership interest in Klépierre, a publicly traded, Paris-based real estate company, which owns shopping centers in 14 European countries.