Critical Analysis: Service Properties Trust (NASDAQ:SVC) versus Global Self Storage (NASDAQ:SELF)

Global Self Storage (NASDAQ:SELF) and Service Properties Trust (NASDAQ:SVC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Global Self Storage and Service Properties Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Self Storage	0	1	0	0	2.00
Service Properties Trust	1	2	3	0	2.33

Service Properties Trust has a consensus target price of $12.81, indicating a potential upside of 47.10%. Given Service Properties Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Service Properties Trust is more favorable than Global Self Storage.

Valuation and Earnings

This table compares Global Self Storage and Service Properties Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Self Storage	$12.70 million	4.65	$2.04 million	$0.17	30.41
Service Properties Trust	$1.81 billion	3.11	-$202.32 million	($1.42)	-6.13

Global Self Storage has higher earnings, but lower revenue than Service Properties Trust. Service Properties Trust is trading at a lower price-to-earnings ratio than Global Self Storage, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Global Self Storage and Service Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Self Storage	15.37%	4.19%	3.04%
Service Properties Trust	-13.59%	-38.18%	-3.58%

Institutional & Insider Ownership

28.9% of Global Self Storage shares are held by institutional investors. Comparatively, 77.6% of Service Properties Trust shares are held by institutional investors. 10.7% of Global Self Storage shares are held by company insiders. Comparatively, 1.6% of Service Properties Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Global Self Storage pays an annual dividend of $0.29 per share and has a dividend yield of 5.6%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Global Self Storage pays out 170.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Service Properties Trust pays out -2.8% of its earnings in the form of a dividend.

Summary

Global Self Storage beats Service Properties Trust on 9 of the 15 factors compared between the two stocks.

About Global Self Storage

Global Self Storage is a self-administered and self-managed REIT that owns, operates, manages, acquires, and redevelops self-storage properties. The company's self-storage properties are designed to offer affordable, easily accessible and secure storage space for residential and commercial customers. Through its wholly owned subsidiaries, the company owns and/or manages 13 self-storage properties in Connecticut, Illinois, Indiana, New York, Ohio, Pennsylvania, South Carolina, and Oklahoma.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.