Urban Edge Properties (NYSE:UE) and Office Properties Income Trust (NASDAQ:OPI) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.
Volatility and Risk
Urban Edge Properties has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Office Properties Income Trust has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.
88.9% of Urban Edge Properties shares are owned by institutional investors. Comparatively, 66.5% of Office Properties Income Trust shares are owned by institutional investors. 4.9% of Urban Edge Properties shares are owned by insiders. Comparatively, 1.7% of Office Properties Income Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Urban Edge Properties and Office Properties Income Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Urban Edge Properties||26.64%||10.84%||3.88%|
|Office Properties Income Trust||1.13%||0.95%||0.34%|
Earnings & Valuation
This table compares Urban Edge Properties and Office Properties Income Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Urban Edge Properties||$414.16 million||5.00||$105.15 million||$1.31||13.14|
|Office Properties Income Trust||$426.56 million||3.04||-$21.88 million||$7.95||3.39|
Urban Edge Properties has higher earnings, but lower revenue than Office Properties Income Trust. Office Properties Income Trust is trading at a lower price-to-earnings ratio than Urban Edge Properties, indicating that it is currently the more affordable of the two stocks.
Urban Edge Properties pays an annual dividend of $0.88 per share and has a dividend yield of 5.1%. Office Properties Income Trust pays an annual dividend of $2.20 per share and has a dividend yield of 8.2%. Urban Edge Properties pays out 67.2% of its earnings in the form of a dividend. Office Properties Income Trust pays out 27.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Office Properties Income Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and price targets for Urban Edge Properties and Office Properties Income Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Urban Edge Properties||1||0||0||0||1.00|
|Office Properties Income Trust||0||3||0||0||2.00|
Office Properties Income Trust has a consensus price target of $26.33, suggesting a potential downside of 2.25%. Given Office Properties Income Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Office Properties Income Trust is more favorable than Urban Edge Properties.
Urban Edge Properties beats Office Properties Income Trust on 8 of the 15 factors compared between the two stocks.
About Urban Edge Properties
Urban Edge Properties is a NYSE listed real estate investment trust focused on managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the New York metropolitan region. Urban Edge owns 87 properties totaling 16.1 million square feet of gross leasable area.
About Office Properties Income Trust
Office Properties Income Trust is a real estate investment trust, or REIT, which owns buildings primarily leased to single tenants and those with high credit quality characteristics like government entities. In December 2018, our predecessor company Government Properties Income Trust, or GOV, merged with Select Income REIT, or SIR, and the combined company was renamed Office Properties Income Trust, or OPI. Combining the two companies creates a national office REIT with increased scale, enhanced tenant and geographic diversification, a well-laddered lease expiration schedule, a broader investment strategy, and a company with one of the highest percentages of rent paid by investment grade rated tenants in the office sector.
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