Liberty Property Trust (NYSE: LPT) and Select Income REIT (NASDAQ:SIR) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.
Liberty Property Trust pays an annual dividend of $1.60 per share and has a dividend yield of 3.9%. Select Income REIT pays an annual dividend of $2.04 per share and has a dividend yield of 9.0%. Liberty Property Trust pays out 67.5% of its earnings in the form of a dividend. Select Income REIT pays out 204.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Liberty Property Trust has increased its dividend for 3 consecutive years.
This is a breakdown of current ratings for Liberty Property Trust and Select Income REIT, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty Property Trust||1||5||3||0||2.22|
|Select Income REIT||0||1||2||0||2.67|
Liberty Property Trust presently has a consensus price target of $42.67, suggesting a potential upside of 3.33%. Select Income REIT has a consensus price target of $19.75, suggesting a potential downside of 13.00%. Given Liberty Property Trust’s higher possible upside, equities analysts plainly believe Liberty Property Trust is more favorable than Select Income REIT.
Insider & Institutional Ownership
91.2% of Liberty Property Trust shares are owned by institutional investors. Comparatively, 47.8% of Select Income REIT shares are owned by institutional investors. 1.5% of Liberty Property Trust shares are owned by company insiders. Comparatively, 2.0% of Select Income REIT shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
Liberty Property Trust has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Select Income REIT has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.
This table compares Liberty Property Trust and Select Income REIT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Liberty Property Trust||47.78%||11.41%||5.69%|
|Select Income REIT||19.15%||4.36%||1.91%|
Earnings & Valuation
This table compares Liberty Property Trust and Select Income REIT’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Liberty Property Trust||$746.71 million||8.15||$356.81 million||$2.37||17.42|
|Select Income REIT||$462.01 million||4.40||$116.32 million||$1.00||22.70|
Liberty Property Trust has higher revenue and earnings than Select Income REIT. Liberty Property Trust is trading at a lower price-to-earnings ratio than Select Income REIT, indicating that it is currently the more affordable of the two stocks.
Liberty Property Trust beats Select Income REIT on 14 of the 17 factors compared between the two stocks.
About Liberty Property Trust
Liberty Property Trust (the Trust) is a self-administered and self-managed Maryland real estate investment trust (REIT). The Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership (the Operating Partnership). The Company’s segments include Carolinas/Richmond; Chicago/Milwaukee; Florida; Houston; Lehigh/Central PA; Minnesota; Philadelphia; Southeastern PA; United Kingdom, and Other, which includes Arizona; Atlanta; Cincinnati/Columbus/Indianapolis; Dallas; DC Metro; New Jersey; Southern California, and other. The Company owns and operates industrial properties nationally and owns and operates office properties in a focused group of office markets. Additionally, the Company owns certain assets in the United Kingdom. As of December 31, 2016, the Company owned and operated 450 industrial and 55 office properties totaling 86.0 million square feet.
About Select Income REIT
Select Income REIT is a real estate investment trust. The Company is engaged in the ownership of properties that include buildings and leased industrial lands that are primarily net leased to single tenants. As of December 31, 2016, the Company owned 121 properties (362 buildings, leasable land parcels and easements) with approximately 44.8 million rentable square feet. As of December 31, 2016, the Company’s properties consisted of 110 office and industrial properties (133 buildings) with approximately 27.0 million square feet located in 34 states throughout the mainland United States (Mainland Properties), and 11 properties (229 buildings, leasable land parcels and easements) located on the island of Oahu, Hawaii, with approximately 17.8 million rentable square feet that are primarily leased to industrial and commercial tenants (Hawaii Properties). As of December 31, 2016, the Company’s properties were leased to 312 different tenants.
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