Comparing NNN REIT (NYSE:NNN) and Franklin Street Properties (NYSE:FSP)

NNN REIT (NYSE:NNN) and Franklin Street Properties (NYSE:FSP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a summary of current ratings and price targets for NNN REIT and Franklin Street Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NNN REIT	0	3	2	0	2.40
Franklin Street Properties	0	0	0	0	N/A

NNN REIT currently has a consensus target price of $44.50, indicating a potential upside of 6.46%. Franklin Street Properties has a consensus target price of $2.50, indicating a potential upside of 29.53%. Given Franklin Street Properties’ higher probable upside, analysts plainly believe Franklin Street Properties is more favorable than NNN REIT.

Volatility and Risk

NNN REIT has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Franklin Street Properties has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Dividends

NNN REIT pays an annual dividend of $2.26 per share and has a dividend yield of 5.4%. Franklin Street Properties pays an annual dividend of $0.04 per share and has a dividend yield of 2.1%. NNN REIT pays out 103.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin Street Properties pays out -7.1% of its earnings in the form of a dividend. NNN REIT has increased its dividend for 34 consecutive years. NNN REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

90.0% of NNN REIT shares are held by institutional investors. Comparatively, 61.4% of Franklin Street Properties shares are held by institutional investors. 0.8% of NNN REIT shares are held by insiders. Comparatively, 6.2% of Franklin Street Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares NNN REIT and Franklin Street Properties’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NNN REIT	$828.11 million	9.25	$392.34 million	$2.18	19.17
Franklin Street Properties	$145.71 million	1.37	-$48.11 million	($0.56)	-3.45

NNN REIT has higher revenue and earnings than Franklin Street Properties. Franklin Street Properties is trading at a lower price-to-earnings ratio than NNN REIT, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares NNN REIT and Franklin Street Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NNN REIT	47.24%	9.53%	4.63%
Franklin Street Properties	-41.73%	-8.05%	-5.09%

Summary

NNN REIT beats Franklin Street Properties on 13 of the 16 factors compared between the two stocks.

About NNN REIT

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years.

About Franklin Street Properties

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.