Financial Survey: Independence Realty Trust (NYSE:IRT) versus Service Properties Trust (NASDAQ:SVC)

Service Properties Trust (NASDAQ:SVC) and Independence Realty Trust (NYSE:IRT) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Profitability

This table compares Service Properties Trust and Independence Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Service Properties Trust	-12.87%	-22.67%	-3.37%
Independence Realty Trust	-0.03%	-0.01%	N/A

Earnings & Valuation

This table compares Service Properties Trust and Independence Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Service Properties Trust	$1.88 billion	0.22	-$32.78 million	($1.47)	-1.66
Independence Realty Trust	$646.12 million	7.03	-$17.23 million	$0.27	74.74

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

Insider & Institutional Ownership

77.6% of Service Properties Trust shares are owned by institutional investors. Comparatively, 88.3% of Independence Realty Trust shares are owned by institutional investors. 1.4% of Service Properties Trust shares are owned by insiders. Comparatively, 0.7% of Independence Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Service Properties Trust has a beta of 2.19, indicating that its stock price is 119% more volatile than the S&P 500. Comparatively, Independence Realty Trust has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Service Properties Trust and Independence Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Service Properties Trust	1	0	1	0	2.00
Independence Realty Trust	0	2	5	0	2.71

Service Properties Trust presently has a consensus target price of $5.38, suggesting a potential upside of 120.29%. Independence Realty Trust has a consensus target price of $21.14, suggesting a potential upside of 4.77%. Given Service Properties Trust’s higher probable upside, research analysts clearly believe Service Properties Trust is more favorable than Independence Realty Trust.

Dividends

Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.6%. Independence Realty Trust pays an annual dividend of $0.64 per share and has a dividend yield of 3.2%. Service Properties Trust pays out -2.7% of its earnings in the form of a dividend. Independence Realty Trust pays out 237.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Independence Realty Trust beats Service Properties Trust on 11 of the 16 factors compared between the two stocks.

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.

About Independence Realty Trust

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.