Global Net Lease (NYSE: GNL) and Gladstone Commercial Corporation (NASDAQ:GOOD) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitabiliy, valuation, institutional ownership, earnings and analyst recommendations.

Valuation & Earnings

This table compares Global Net Lease and Gladstone Commercial Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Global Net Lease $222.06 million 6.37 $171.09 million $0.61 34.87
Gladstone Commercial Corporation $88.78 million 6.50 $72.08 million ($0.12) -174.00

Global Net Lease has higher revenue and earnings than Gladstone Commercial Corporation. Gladstone Commercial Corporation is trading at a lower price-to-earnings ratio than Global Net Lease, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

41.1% of Global Net Lease shares are owned by institutional investors. Comparatively, 48.2% of Gladstone Commercial Corporation shares are owned by institutional investors. 0.2% of Global Net Lease shares are owned by insiders. Comparatively, 2.2% of Gladstone Commercial Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 10.0%. Gladstone Commercial Corporation pays an annual dividend of $1.50 per share and has a dividend yield of 7.2%. Global Net Lease pays out 349.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Commercial Corporation pays out -1,250.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Global Net Lease and Gladstone Commercial Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Net Lease 0 1 0 0 2.00
Gladstone Commercial Corporation 0 2 1 0 2.33

Global Net Lease currently has a consensus price target of $24.45, suggesting a potential upside of 14.95%. Gladstone Commercial Corporation has a consensus price target of $22.50, suggesting a potential upside of 7.76%. Given Global Net Lease’s higher possible upside, equities analysts plainly believe Global Net Lease is more favorable than Gladstone Commercial Corporation.

Profitability

This table compares Global Net Lease and Gladstone Commercial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Global Net Lease 16.04% 2.93% 1.37%
Gladstone Commercial Corporation 8.15% 3.08% 0.86%

Risk and Volatility

Global Net Lease has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Gladstone Commercial Corporation has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Summary

Gladstone Commercial Corporation beats Global Net Lease on 9 of the 16 factors compared between the two stocks.

Global Net Lease Company Profile

Global Net Lease, Inc. is a real estate investment trust. The Company’s business consists of owning, managing, operating, leasing, acquiring, investing in and disposing of real estate assets. It owns and invests in commercial properties principally in the United States, the United Kingdom and continental Europe that are then leased to companies. It was formed to primarily acquire a portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant net-leased commercial properties. As of December 31, 2016, it owned 310 properties consisting of 22 million rentable square feet. As of December 31, 2016, its owned 310 properties, including 241 properties located in the United States and Puerto Rico, 43 properties located in the United Kingdom and 26 properties located across continental Europe. It may also originate or acquire first mortgage loans secured by real estate. Its business is conducted through Global Net Lease Operating Partnership, L.P.

Gladstone Commercial Corporation Company Profile

Gladstone Commercial Corporation is a real estate investment trust. The Company focuses on acquiring, owning and managing primarily office and industrial properties. The Company also makes long-term industrial and commercial mortgage loans. As of February 15, 2017, the Company owned 95 properties totaling 10.9 million square feet in 24 states. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Ohio, Pennsylvania, North Carolina, Georgia, South Carolina, Michigan, Minnesota, Colorado and New Jersey. The Company’s properties have tenants from various industries, such as telecommunications; healthcare; automobile; electronics; information technology; chemicals, plastics and rubber; containers, packaging and glass; personal and non-durable consumer products; machinery; banking; childcare; buildings and real estate; beverage, food and tobacco; printing and publishing; education; home and office furnishings, and oil and gas.

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