Net Lease Office Properties (NYSE:NLOP) and Easterly Government Properties (NYSE:DEA) Financial Analysis

Net Lease Office Properties (NYSE:NLOP) and Easterly Government Properties (NYSE:DEA) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Volatility & Risk

Net Lease Office Properties has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Easterly Government Properties has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Profitability

This table compares Net Lease Office Properties and Easterly Government Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Net Lease Office Properties	-122.31%	-34.26%	-25.39%
Easterly Government Properties	3.22%	0.82%	0.33%

Insider & Institutional Ownership

58.3% of Net Lease Office Properties shares are held by institutional investors. Comparatively, 86.5% of Easterly Government Properties shares are held by institutional investors. 0.7% of Net Lease Office Properties shares are held by company insiders. Comparatively, 6.5% of Easterly Government Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Net Lease Office Properties and Easterly Government Properties, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Net Lease Office Properties	1	0	0	0	1.00
Easterly Government Properties	1	3	1	0	2.00

Easterly Government Properties has a consensus target price of $23.49, suggesting a potential downside of 2.85%. Given Easterly Government Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Easterly Government Properties is more favorable than Net Lease Office Properties.

Valuation & Earnings

This table compares Net Lease Office Properties and Easterly Government Properties”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Net Lease Office Properties	$118.92 million	1.38	-$145.26 million	($8.14)	-1.36
Easterly Government Properties	$336.10 million	3.34	$13.00 million	$0.24	100.75

Easterly Government Properties has higher revenue and earnings than Net Lease Office Properties. Net Lease Office Properties 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.

Summary

Easterly Government Properties beats Net Lease Office Properties on 14 of the 14 factors compared between the two stocks.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.

About Easterly Government Properties

Easterly Government Properties, Inc. (NYSE: DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).