VEREIT (VER) & Gladstone Commercial Corporation (GOOD) Critical Analysis
VEREIT (NYSE: VER) and Gladstone Commercial Corporation (NASDAQ:GOOD) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.
Volatility & Risk
VEREIT has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Gladstone Commercial Corporation has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.
Insider and Institutional Ownership
86.0% of VEREIT shares are owned by institutional investors. Comparatively, 49.1% of Gladstone Commercial Corporation shares are owned by institutional investors. 0.1% of VEREIT 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 stock will outperform the market over the long term.
Earnings and Valuation
This table compares VEREIT and Gladstone Commercial Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|VEREIT||$1.40 billion||5.91||$1.12 billion||($0.11)||-77.27|
|Gladstone Commercial Corporation||$88.78 million||6.85||$72.08 million||($0.12)||-183.25|
VEREIT has higher revenue and earnings than Gladstone Commercial Corporation. Gladstone Commercial Corporation is trading at a lower price-to-earnings ratio than VEREIT, indicating that it is currently the more affordable of the two stocks.
This table compares VEREIT and Gladstone Commercial Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gladstone Commercial Corporation||8.15%||3.08%||0.86%|
VEREIT pays an annual dividend of $0.55 per share and has a dividend yield of 6.5%. Gladstone Commercial Corporation pays an annual dividend of $1.50 per share and has a dividend yield of 6.8%. VEREIT pays out -500.0% of its earnings in the form of a dividend. Gladstone Commercial Corporation pays out -1,250.0% 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. Gladstone Commercial Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and recommmendations for VEREIT and Gladstone Commercial Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gladstone Commercial Corporation||0||3||2||0||2.40|
VEREIT presently has a consensus price target of $9.88, suggesting a potential upside of 16.18%. Gladstone Commercial Corporation has a consensus price target of $22.50, suggesting a potential upside of 2.32%. Given VEREIT’s stronger consensus rating and higher possible upside, equities analysts clearly believe VEREIT is more favorable than Gladstone Commercial Corporation.
Gladstone Commercial Corporation beats VEREIT on 8 of the 15 factors compared between the two stocks.
VEREIT, Inc. is a full-service real estate operating company. The Company operates through two business segments: real estate investment (REI) segment and investment management segment, Cole Capital. As of December 31, 2016, through its REI segment, the Company owned and managed a portfolio of 4,142 retail, restaurant, office and industrial real estate properties with an aggregate of 93.3 million square feet, which are located in 49 states, Puerto Rico and Canada. Through its Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of certain non-listed real estate investment trusts (the Cole REITs) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include over four publicly registered, non-traded REITs.
About Gladstone Commercial Corporation
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.
Receive News & Ratings for VEREIT Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for VEREIT Inc. and related companies with MarketBeat.com's FREE daily email newsletter.