Analyzing iStar Financial (STAR) and Investors Real Estate Trust (IRET)
iStar Financial (NYSE: STAR) and Investors Real Estate Trust (NYSE:IRET) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.
Institutional & Insider Ownership
83.1% of iStar Financial shares are owned by institutional investors. Comparatively, 53.0% of Investors Real Estate Trust shares are owned by institutional investors. 4.4% of iStar Financial shares are owned by insiders. Comparatively, 1.0% of Investors Real Estate Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares iStar Financial and Investors Real Estate Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|iStar Financial||$477.03 million||1.63||$95.30 million||$0.91||12.53|
|Investors Real Estate Trust||$205.74 million||3.45||$43.34 million||$0.35||16.82|
iStar Financial has higher revenue and earnings than Investors Real Estate Trust. iStar Financial is trading at a lower price-to-earnings ratio than Investors Real Estate Trust, indicating that it is currently the more affordable of the two stocks.
This table compares iStar Financial and Investors Real Estate Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Investors Real Estate Trust||25.72%||0.11%||0.03%|
This is a summary of recent recommendations for iStar Financial and Investors Real Estate Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Investors Real Estate Trust||0||1||0||0||2.00|
iStar Financial presently has a consensus target price of $14.00, suggesting a potential upside of 22.81%. Investors Real Estate Trust has a consensus target price of $6.50, suggesting a potential upside of 10.42%. Given iStar Financial’s higher probable upside, equities analysts plainly believe iStar Financial is more favorable than Investors Real Estate Trust.
Volatility & Risk
iStar Financial has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, Investors Real Estate Trust has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.
Investors Real Estate Trust pays an annual dividend of $0.28 per share and has a dividend yield of 4.8%. iStar Financial does not pay a dividend. Investors Real Estate Trust pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
iStar Financial beats Investors Real Estate Trust on 10 of the 14 factors compared between the two stocks.
About iStar Financial
iStar Inc. finances, invests in and develops real estate and real estate related projects as part of its integrated investment platform. The Company’s four business segments are Real Estate Finance, Net Lease, Operating Properties, and Land and Development. The Real Estate Finance portfolio consists of senior and mezzanine real estate loans that may be either fixed-rate or variable-rate. The Net Lease portfolio consists of properties owned by the Company and leased to single tenants, where the properties are subject to long-term leases. The Operating Properties portfolio consists of commercial and residential properties, which represent a pool of assets across a range of geographies and property types. The Land and Development portfolio consists of land entitled for master planned communities, as well as waterfront and urban infill land parcels located throughout the United States. Its Land and Development projects include Great Oaks, Sage Scottsdale, Naples Reserve and Coney Island.
About Investors Real Estate Trust
Investors Real Estate Trust is a self-advised equity real estate investment trust (REIT). The Company’s business consists of owning and operating income-producing real estate properties. Its segments include Multifamily, Healthcare and All Other. Its investments consist of multifamily and healthcare properties located primarily in the upper Midwest states of Minnesota and North Dakota. It conducts its business operations through its operating partnership, IRET Properties, which is principally engaged in acquiring, owning, operating and leasing real estate. It invests in multifamily properties and commercial properties that are leased to single or multiple tenants, usually for approximately five years or longer. As of May 26, 2017, the Company held for investment 86 multifamily properties containing 12,813 apartment units and 44 commercial properties, consisting of healthcare, industrial, office and retail, containing approximately 2.7 million square feet of leasable space.
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