Government Properties Income Trust (NASDAQ: GOV) and Easterly Government Properties (NYSE:DEA) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.
Risk and Volatility
Government Properties Income Trust has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Easterly Government Properties has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.
Insider and Institutional Ownership
58.3% of Government Properties Income Trust shares are owned by institutional investors. Comparatively, 87.3% of Easterly Government Properties shares are owned by institutional investors. 2.7% of Government Properties Income Trust shares are owned by insiders. Comparatively, 15.6% of Easterly Government Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings for Government Properties Income Trust and Easterly Government Properties, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Government Properties Income Trust||2||1||2||0||2.00|
|Easterly Government Properties||0||1||1||0||2.50|
Government Properties Income Trust presently has a consensus price target of $18.75, suggesting a potential upside of 1.63%. Easterly Government Properties has a consensus price target of $22.25, suggesting a potential upside of 2.68%. Given Easterly Government Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Easterly Government Properties is more favorable than Government Properties Income Trust.
Government Properties Income Trust pays an annual dividend of $1.72 per share and has a dividend yield of 9.3%. Easterly Government Properties pays an annual dividend of $1.04 per share and has a dividend yield of 4.8%. Government Properties Income Trust pays out 318.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Easterly Government Properties pays out 1,040.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Government Properties Income Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Government Properties Income Trust and Easterly Government Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Government Properties Income Trust||15.30%||4.27%||1.66%|
|Easterly Government Properties||3.12%||0.54%||0.32%|
Valuation & Earnings
This table compares Government Properties Income Trust and Easterly Government Properties’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Government Properties Income Trust||$258.18 million||7.09||$57.84 million||$0.54||34.17|
|Easterly Government Properties||$104.62 million||9.09||$3.41 million||$0.10||216.70|
Government Properties Income Trust has higher revenue and earnings than Easterly Government Properties. Government Properties Income Trust 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.
Government Properties Income Trust beats Easterly Government Properties on 10 of the 16 factors compared between the two stocks.
Government Properties Income Trust Company Profile
Government Properties Income Trust is a real estate investment trust (REIT). The Company operates through two segments: ownership of properties that are primarily leased to government tenants and its equity method investment in Select Income REIT (SIR). The Company’s properties are located in areas, including Alabama, Arizona, California, Colorado, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey and New Mexico. As of December 31, 2016, the Company owned 73 properties (95 buildings). As of December 31, 2016, the Company’s properties were located in 31 states and the District of Columbia, and contained approximately 11.4 million rentable square feet.
Easterly Government Properties Company Profile
Easterly Government Properties, Inc. is an internally managed real estate investment trust (REIT). The Company focuses on the acquisition, development and management of Class A commercial properties that are leased to the United States Government agencies. The Company leases its properties to such agencies through the United States General Services Administration (GSA). The operations of the Company are carried on primarily through Easterly Government Properties, LP and the subsidiaries of the Operating Partnership. As of December 31, 2016, it had 43 operating properties in the United States, including 40 operating properties that are leased primarily to the United States Government tenant agencies and three operating properties that are entirely leased to private tenants, encompassing approximately 3.1 million square feet in the aggregate. In addition, the Company had one property under development encompassing approximately 0.1 million square feet as of December 31, 2016.
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