Washington Real Estate Investment Trust (NYSE: WRE) and Seritage Growth Properties (NYSE:SRG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Dividends

Washington Real Estate Investment Trust pays an annual dividend of $1.20 per share and has a dividend yield of 3.7%. Seritage Growth Properties pays an annual dividend of $1.00 per share. Washington Real Estate Investment Trust pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Seritage Growth Properties pays out -42.2% of its earnings in the form of a dividend.

Profitability

This table compares Washington Real Estate Investment Trust and Seritage Growth Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Real Estate Investment Trust 7.10% 2.10% 0.98%
Seritage Growth Properties -31.23% -5.52% -2.83%

Institutional and Insider Ownership

85.0% of Washington Real Estate Investment Trust shares are owned by institutional investors. Comparatively, 74.9% of Seritage Growth Properties shares are owned by institutional investors. 0.6% of Washington Real Estate Investment Trust shares are owned by company insiders. Comparatively, 9.8% of Seritage Growth Properties shares are owned 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.

Volatility and Risk

Washington Real Estate Investment Trust has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Seritage Growth Properties has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Washington Real Estate Investment Trust and Seritage Growth Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Real Estate Investment Trust 0 3 3 0 2.50
Seritage Growth Properties 1 1 0 0 1.50

Washington Real Estate Investment Trust presently has a consensus target price of $33.92, suggesting a potential upside of 3.50%. Seritage Growth Properties has a consensus target price of $43.00, suggesting a potential upside of Infinity. Given Seritage Growth Properties’ higher probable upside, analysts clearly believe Seritage Growth Properties is more favorable than Washington Real Estate Investment Trust.

Valuation & Earnings

This table compares Washington Real Estate Investment Trust and Seritage Growth Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Washington Real Estate Investment Trust $313.26 8.21 $119.33 $0.30 109.23
Seritage Growth Properties $248.67 0.00 -$51.55 ($2.37) N/A

Washington Real Estate Investment Trust has higher revenue and earnings than Seritage Growth Properties. Seritage Growth Properties is trading at a lower price-to-earnings ratio than Washington Real Estate Investment Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Washington Real Estate Investment Trust beats Seritage Growth Properties on 10 of the 15 factors compared between the two stocks.

Washington Real Estate Investment Trust Company Profile

Washington Real Estate Investment Trust is a self-administered equity real estate investment trust. The Company’s business consists of the ownership and operation of real property in the greater Washington metro region. The Company owns a diversified portfolio of office buildings, multifamily buildings and retail centers. The Company’s segments include office, multifamily and retail. The Company’s office properties provide office space for various types of businesses and professions. The Company’s multifamily properties provide rental housing for individuals and families throughout the Washington metro region. Its retail properties are typically grocery store anchored neighborhood centers that include other small shop tenants or regional power centers with various junior box tenants. As of April 4, 2017, it owned a diversified portfolio of 50 properties, totaling approximately 6.0 million square feet of commercial space and 4,480 residential units, and land held for development.

Seritage Growth Properties Company Profile

Seritage Growth Properties (Seritage) is a self-administered and self-managed real estate investment trust. The Company is engaged in the acquisition, ownership, development, redevelopment, management and leasing of diversified retail real estate throughout the United States. Its assets are held by and its operations are primarily conducted through, directly or indirectly, Seritage Growth Properties, L.P. (Operating Partnership). As of December 31, 2016, the Company’s portfolio included approximately 42.2 million square feet of gross leasable area (GLA), consisting of 235 owned properties totaling over 36.8 million square feet of GLA across 49 states and Puerto Rico, and interests in 31 joint venture properties totaling over 5.4 million square feet of GLA across 17 states. As of December 31, 2016, it included over 3,000 acres of land or approximately 13 acres per site for its owned properties. Its properties are primarily located in areas, including in California, Florida and Texas.

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