Gladstone Land Stock: Better Investment Than Farmland Partners (NASDAQ:LAND)

This article mentions two Farmland REITs: Gladstone Land (NASDAQ: LAND) and Farmland Partners Inc. (FPI). The author's recommendation is to buy Gladstone Land (LAND), while Farmland Partners Inc. (FPI) is considered a clear sell.

The author's core argument is that Gladstone Land (LAND) is a better investment than Farmland Partners Inc. (FPI) based on various factors:

1. Farmland REITs, including both LAND and FPI, have faced challenges due to lower crop yield, lower crop prices, and higher interest rate expenses.
2. Prices for corn, wheat, and soybeans, which make up a significant portion of farmland acreage, have fallen since last year.
3. Farmland is becoming increasingly valuable due to population growth and shrinking arable land.
4. Gladstone Land focuses on farmland that grows fresh produce, which offers higher profitability and rental income, lower volatility, and closer proximity to major urban areas.
5. Gladstone Land has steady FFO (funds from operations) and cash flow growth, while FPI has seen declining AFFO (adjusted funds from operations).
6. LAND has better liquidity, lower debt ratios, and a stronger balance sheet compared to FPI.
7. LAND has a better dividend score, higher dividend yield, and lower valuation multiples compared to FPI.

The author also mentions the geographic distribution of LAND and FPI's farmland holdings and highlights potential risks in the sector, such as extreme weather, interest rate environments, crop price volatility, and tenant default.