Global Net Lease (NYSE: GNL) and Easterly Government Properties (NYSE:DEA) are both small-cap financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.
This table compares Global Net Lease and Easterly Government Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Global Net Lease||12.65%||2.29%||1.06%|
|Easterly Government Properties||3.12%||0.54%||0.32%|
This table compares Global Net Lease and Easterly Government Properties’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Global Net Lease||$214.17 million||5.78||$47.14 million||$0.49||37.54|
|Easterly Government Properties||$104.62 million||8.68||$3.41 million||$0.10||207.00|
Global Net Lease has higher revenue and earnings than Easterly Government Properties. Global Net Lease is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.
Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 11.6%. Easterly Government Properties pays an annual dividend of $1.04 per share and has a dividend yield of 5.0%. Global Net Lease pays out 434.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Easterly Government Properties pays out 1,040.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Net Lease has raised its dividend for 2 consecutive years. Global Net Lease is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current recommendations and price targets for Global Net Lease and Easterly Government Properties, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Global Net Lease||0||2||0||0||2.00|
|Easterly Government Properties||0||0||2||0||3.00|
Global Net Lease currently has a consensus target price of $26.00, indicating a potential upside of 41.38%. Easterly Government Properties has a consensus target price of $23.50, indicating a potential upside of 13.53%. Given Global Net Lease’s higher possible upside, equities analysts plainly believe Global Net Lease is more favorable than Easterly Government Properties.
Institutional and Insider Ownership
44.4% of Global Net Lease shares are owned by institutional investors. Comparatively, 87.6% of Easterly Government Properties shares are owned by institutional investors. 0.2% of Global Net Lease shares are owned by company insiders. Comparatively, 15.6% of Easterly Government Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Global Net Lease beats Easterly Government Properties on 10 of the 16 factors compared between the two stocks.
About Global Net Lease
Global Net Lease, Inc. is a real estate investment trust. The Company’s business consists of owning, managing, operating, leasing, acquiring, investing in and disposing of real estate assets. It owns and invests in commercial properties principally in the United States, the United Kingdom and continental Europe that are then leased to companies. It was formed to primarily acquire a portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant net-leased commercial properties. As of December 31, 2016, it owned 310 properties consisting of 22 million rentable square feet. As of December 31, 2016, its owned 310 properties, including 241 properties located in the United States and Puerto Rico, 43 properties located in the United Kingdom and 26 properties located across continental Europe. It may also originate or acquire first mortgage loans secured by real estate. Its business is conducted through Global Net Lease Operating Partnership, L.P.
About Easterly Government Properties
Easterly Government Properties, Inc. is an internally managed real estate investment trust (REIT). The Company focuses on the acquisition, development and management of Class A commercial properties that are leased to the United States Government agencies. The Company leases its properties to such agencies through the United States General Services Administration (GSA). The operations of the Company are carried on primarily through Easterly Government Properties, LP and the subsidiaries of the Operating Partnership. As of December 31, 2016, it had 43 operating properties in the United States, including 40 operating properties that are leased primarily to the United States Government tenant agencies and three operating properties that are entirely leased to private tenants, encompassing approximately 3.1 million square feet in the aggregate. In addition, the Company had one property under development encompassing approximately 0.1 million square feet as of December 31, 2016.
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