Head-To-Head Comparison: Lexington Realty Trust (LXP) and Washington Real Estate Investment Trust (WRE)

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

Profitability

This table compares Lexington Realty Trust and Washington Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lexington Realty Trust 17.96% 5.29% 2.00%
Washington Real Estate Investment Trust 7.10% 2.10% 0.98%

Analyst Ratings

This is a summary of recent ratings and price targets for Lexington Realty Trust and Washington Real Estate Investment Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lexington Realty Trust 0 6 0 0 2.00
Washington Real Estate Investment Trust 1 1 2 0 2.25

Lexington Realty Trust currently has a consensus target price of $10.69, indicating a potential upside of 29.23%. Washington Real Estate Investment Trust has a consensus target price of $30.33, indicating a potential upside of 14.77%. Given Lexington Realty Trust’s higher probable upside, equities research analysts clearly believe Lexington Realty Trust is more favorable than Washington Real Estate Investment Trust.

Dividends

Lexington Realty Trust pays an annual dividend of $0.71 per share and has a dividend yield of 8.6%. Washington Real Estate Investment Trust pays an annual dividend of $1.20 per share and has a dividend yield of 4.5%. Lexington Realty Trust pays out 263.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Lexington Realty Trust has increased its dividend for 7 consecutive years. Lexington Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

73.5% of Lexington Realty Trust shares are held by institutional investors. Comparatively, 85.5% of Washington Real Estate Investment Trust shares are held by institutional investors. 3.1% of Lexington Realty Trust shares are held by company insiders. Comparatively, 0.6% of Washington Real Estate Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Lexington Realty Trust and Washington Real Estate Investment Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lexington Realty Trust $429.50 million 4.63 $95.62 million $0.27 30.63
Washington Real Estate Investment Trust $313.26 million 6.62 $119.33 million $0.30 88.10

Washington Real Estate Investment Trust has lower revenue, but higher earnings than Lexington Realty Trust. Lexington Realty Trust 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.

Volatility & Risk

Lexington Realty Trust has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Washington Real Estate Investment Trust has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Summary

Lexington Realty Trust beats Washington Real Estate Investment Trust on 10 of the 17 factors compared between the two stocks.

Lexington Realty Trust Company Profile

Lexington Realty Trust is a real estate investment trust (REIT). The Company owns a portfolio of equity and debt investments in single-tenant commercial properties. As of December 31, 2016, the Company had equity ownership interests in approximately 195 consolidated real estate properties, located in 40 states and containing an aggregate of approximately 43.3 million square feet of space, approximately 96.0% of which was leased. The Company conducts its operations either directly or indirectly through property owner subsidiaries and lender subsidiaries, which are single purpose entities; an operating partnership, Lepercq Corporate Income Fund L.P. (LCIF), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests; Lexington Realty Advisors, Inc. (LRA), a subsidiary of the Company, and investments in joint ventures.

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.

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