W.P. Carey (NYSE: WPC) and Spirit Realty Capital (NYSE:SRC) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitabiliy, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of current ratings and target prices for W.P. Carey and Spirit Realty Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W.P. Carey 1 2 1 0 2.00
Spirit Realty Capital 3 5 5 0 2.15

W.P. Carey presently has a consensus target price of $67.67, suggesting a potential upside of 2.22%. Spirit Realty Capital has a consensus target price of $11.74, suggesting a potential upside of 57.80%. Given Spirit Realty Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Spirit Realty Capital is more favorable than W.P. Carey.

Risk & Volatility

W.P. Carey has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Spirit Realty Capital has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Profitability

This table compares W.P. Carey and Spirit Realty Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
W.P. Carey 33.03% 7.73% 3.17%
Spirit Realty Capital 13.28% 2.10% 1.01%

Dividends

W.P. Carey pays an annual dividend of $4.00 per share and has a dividend yield of 6.0%. Spirit Realty Capital pays an annual dividend of $0.72 per share and has a dividend yield of 9.7%. W.P. Carey pays out 161.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spirit Realty Capital pays out 379.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey has raised its dividend for 16 consecutive years and Spirit Realty Capital has raised its dividend for 2 consecutive years.

Valuation & Earnings

This table compares W.P. Carey and Spirit Realty Capital’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
W.P. Carey $884.11 million 7.98 $715.85 million $2.48 26.69
Spirit Realty Capital $667.15 million 5.40 $586.47 million $0.19 39.16

W.P. Carey has higher revenue and earnings than Spirit Realty Capital. W.P. Carey is trading at a lower price-to-earnings ratio than Spirit Realty Capital, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

49.1% of W.P. Carey shares are owned by institutional investors. Comparatively, 100.0% of Spirit Realty Capital shares are owned by institutional investors. 1.7% of W.P. Carey shares are owned by insiders. Comparatively, 0.5% of Spirit Realty Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

W.P. Carey beats Spirit Realty Capital on 12 of the 17 factors compared between the two stocks.

W.P. Carey Company Profile

W. P. Carey provides long-term, sale-leaseback and build-to-suit transactions for companies worldwide, and manages a global investment portfolio. It has two primary business segments. Under the investment management segment, the Company earns revenue as the advisor to publicly owned, non-actively traded real estate investment trusts (REITs), which are sponsored by the Company under the Corporate Property Associates brand name (the CPA REITs) and invests in similar properties. Under the real estate ownership segment, the Company owns and invests in commercial properties in the United States and the European Union that are then leased to companies, primarily on a single-tenant, triple-net leased basis. As of December 31, 2009, it operated as advisor to Corporate Property Associates 14 Incorporated, Corporate Property Associates 15 Incorporated, Corporate Property Associates 16 – Global Incorporated and Corporate Property Associates 17 – Global Incorporated.

Spirit Realty Capital Company Profile

Spirit Realty Capital, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company’s operations are carried out through Spirit Realty, L.P. (the Operating Partnership). The Company invests in single-tenant, operationally essential real estate throughout the United States that is leased on a long-term, triple-net basis primarily to tenants engaged in retail, service and distribution industries. Single-tenant, operationally essential real estate consists of properties that are generally free-standing, commercial real estate facilities where its tenants conduct retail, service or distribution activities. as of December 31, 2012, the Company’s portfolio of 1,122 owned properties were leased to approximately 165 tenants.

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