Critical Analysis: Sun Communities (NYSE:SUI) versus Four Corners Property Trust (NYSE:FCPT)

Four Corners Property Trust (NYSE:FCPT) and Sun Communities (NYSE:SUI) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and price targets for Four Corners Property Trust and Sun Communities, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Four Corners Property Trust	0	3	3	0	2.50
Sun Communities	1	6	5	0	2.33

Four Corners Property Trust currently has a consensus price target of $30.40, indicating a potential upside of 8.84%. Sun Communities has a consensus price target of $134.55, indicating a potential upside of 6.77%. Given Four Corners Property Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe Four Corners Property Trust is more favorable than Sun Communities.

Dividends

Four Corners Property Trust pays an annual dividend of $1.42 per share and has a dividend yield of 5.1%. Sun Communities pays an annual dividend of $3.76 per share and has a dividend yield of 3.0%. Four Corners Property Trust pays out 132.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities pays out 202.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Four Corners Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

98.7% of Four Corners Property Trust shares are held by institutional investors. Comparatively, 99.6% of Sun Communities shares are held by institutional investors. 1.2% of Four Corners Property Trust shares are held by company insiders. Comparatively, 1.9% of Sun Communities shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Four Corners Property Trust and Sun Communities”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Four Corners Property Trust	$250.61 million	10.78	$95.34 million	$1.07	26.10
Sun Communities	$3.22 billion	4.98	-$201.00 million	$1.86	67.75

Four Corners Property Trust has higher earnings, but lower revenue than Sun Communities. Four Corners Property Trust is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Four Corners Property Trust and Sun Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Four Corners Property Trust	37.27%	7.68%	3.96%
Sun Communities	7.46%	3.21%	1.40%

Volatility & Risk

Four Corners Property Trust has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Summary

Four Corners Property Trust beats Sun Communities on 10 of the 16 factors compared between the two stocks.

About Four Corners Property Trust

Four Corners Property Trust, Inc. engages in the owning, acquisition, and leasing of properties for use in the restaurant and food-service related industries. It operates through the Real Estate Operations and Restaurant Operations segments. The Real Estate Operations segment consists of rental revenues generated by leasing restaurant properties. The Restaurant Operations segment includes the Kerrow Restaurant operating business. The company was founded on July 2, 2015 and is headquartered in Mill Valley, CA.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.