Comparing NNN REIT (NYSE:NNN) & Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI)

NNN REIT (NYSE:NNN) and Hannon Armstrong Sustainable Infrastructure Capital (NYSE:HASI) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Valuation and Earnings

This table compares NNN REIT and Hannon Armstrong Sustainable Infrastructure Capital’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NNN REIT	$828.11 million	8.83	$392.34 million	$2.16	18.52
Hannon Armstrong Sustainable Infrastructure Capital	$289.84 million	9.79	$148.84 million	$1.34	18.60

NNN REIT has higher revenue and earnings than Hannon Armstrong Sustainable Infrastructure Capital. NNN REIT is trading at a lower price-to-earnings ratio than Hannon Armstrong Sustainable Infrastructure Capital, indicating that it is currently the more affordable of the two stocks.

Dividends

NNN REIT pays an annual dividend of $2.26 per share and has a dividend yield of 5.7%. Hannon Armstrong Sustainable Infrastructure Capital pays an annual dividend of $1.66 per share and has a dividend yield of 6.7%. NNN REIT pays out 104.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hannon Armstrong Sustainable Infrastructure Capital pays out 123.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NNN REIT has increased its dividend for 34 consecutive years and Hannon Armstrong Sustainable Infrastructure Capital has increased its dividend for 6 consecutive years.

Volatility and Risk

NNN REIT has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Hannon Armstrong Sustainable Infrastructure Capital has a beta of 1.88, meaning that its share price is 88% more volatile than the S&P 500.

Institutional and Insider Ownership

90.0% of NNN REIT shares are held by institutional investors. Comparatively, 96.1% of Hannon Armstrong Sustainable Infrastructure Capital shares are held by institutional investors. 0.8% of NNN REIT shares are held by insiders. Comparatively, 2.3% of Hannon Armstrong Sustainable Infrastructure Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares NNN REIT and Hannon Armstrong Sustainable Infrastructure Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NNN REIT	47.38%	9.45%	4.64%
Hannon Armstrong Sustainable Infrastructure Capital	46.53%	10.93%	3.76%

Analyst Ratings

This is a summary of current recommendations and price targets for NNN REIT and Hannon Armstrong Sustainable Infrastructure Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NNN REIT	1	2	2	0	2.20
Hannon Armstrong Sustainable Infrastructure Capital	0	2	5	0	2.71

NNN REIT currently has a consensus target price of $44.50, suggesting a potential upside of 11.25%. Hannon Armstrong Sustainable Infrastructure Capital has a consensus target price of $31.89, suggesting a potential upside of 27.91%. Given Hannon Armstrong Sustainable Infrastructure Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Hannon Armstrong Sustainable Infrastructure Capital is more favorable than NNN REIT.

Summary

Hannon Armstrong Sustainable Infrastructure Capital beats NNN REIT on 10 of the 17 factors compared between the two stocks.

About NNN REIT

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years.

About Hannon Armstrong Sustainable Infrastructure Capital

Hannon Armstrong Sustainable Infrastructure Capital, Inc., through its subsidiaries, engages in the investment in energy efficiency, renewable energy, and sustainable infrastructure markets in the United States. The company's portfolio includes equity investments, commercial and government receivables, real estate, and debt securities. It invests in climate solution, including Behind-the-Meter that distributes energy projects which reduce energy usage or cost through heating, ventilation, and air conditioning systems, as well as lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems; Grid-Connected, a renewable energy projects that deploy cleaner energy sources, such as solar, solar-plus-storage, and wind to generate power production; and Fuels, Transport, and Nature, a range of real assets spanning high-emitting economic sectors other than the power grid such as transportation and fuels comprising renewable natural gas plants, transportation fleet enhancements, ecological restoration, and other projects. Hannon Armstrong Sustainable Infrastructure Capital, Inc. was founded in 1981 and is headquartered in Annapolis, Maryland.