New York REIT (NYSE: NYRT) and Realty Income (NYSE:O) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Volatility & Risk

New York REIT has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, Realty Income has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.

Valuation & Earnings

This table compares New York REIT and Realty Income’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New York REIT $160.27 million 5.13 -$82.52 million ($0.50) -9.80
Realty Income $1.10 billion 14.55 $315.57 million $1.22 46.70

Realty Income has higher revenue and earnings than New York REIT. New York REIT is trading at a lower price-to-earnings ratio than Realty Income, indicating that it is currently the more affordable of the two stocks.

Dividends

Realty Income pays an annual dividend of $2.54 per share and has a dividend yield of 4.5%. New York REIT does not pay a dividend. Realty Income pays out 208.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New York REIT has increased its dividend for 2 consecutive years and Realty Income has increased its dividend for 21 consecutive years.

Profitability

This table compares New York REIT and Realty Income’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New York REIT N/A -1.95% -0.86%
Realty Income 29.37% 5.11% 2.64%

Insider & Institutional Ownership

70.4% of New York REIT shares are owned by institutional investors. Comparatively, 70.0% of Realty Income shares are owned by institutional investors. 0.2% of New York REIT shares are owned by company insiders. Comparatively, 0.3% of Realty Income shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for New York REIT and Realty Income, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New York REIT 0 1 1 0 2.50
Realty Income 1 4 3 0 2.25

New York REIT presently has a consensus target price of $8.38, indicating a potential upside of 70.92%. Realty Income has a consensus target price of $66.60, indicating a potential upside of 16.90%. Given New York REIT’s stronger consensus rating and higher possible upside, equities research analysts clearly believe New York REIT is more favorable than Realty Income.

Summary

Realty Income beats New York REIT on 12 of the 17 factors compared between the two stocks.

New York REIT Company Profile

New York REIT, Inc. is a real estate investment trust. The Company owns a portfolio of commercial real estate. The Company’s business is primarily conducted through New York Recovery Operating Partnership, L.P. As of December 31, 2016, the Company owned 19 properties, which aggregated 3.3 million rentable square feet. The Company holds interests in properties of various types, such as office, retail, hotel, parking and storage. The Company’s properties include Design Center, 416 Washington Street, 50 Varick Street, 1440 Broadway, One Worldwide Plaza, 256 West 38th Street, 229 West 36th Street, 333 West 34th Street, 367-387 Bleecker Street, 33 West 56th Street (garage) and 350 West 42nd Street.

Realty Income Company Profile

Realty Income Corporation is a real estate investment trust (REIT). The Company is engaged in in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities. As of December 31, 2016, the Company owned a diversified portfolio of 4,944 properties located in 49 states and Puerto Rico, with over 83.0 million square feet of leasable space leased to 248 different commercial tenants doing business in 47 separate industries. As of December 31, 2016, of the 4,944 properties in the portfolio, 4,920, or 99.5%, were single-tenant properties, and the remaining were multi-tenant properties. As of December 31, 2016, of the 4,920 single-tenant properties, 4,836 were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.8 years.

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