First Potomac Realty Trust (NYSE: FPO) and New York REIT (NYSE:NYRT) are both small-cap commercial reits – nec companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for First Potomac Realty Trust and New York REIT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Potomac Realty Trust 2 2 1 0 1.80
New York REIT 0 0 1 0 3.00

First Potomac Realty Trust currently has a consensus price target of $11.03, suggesting a potential downside of 0.99%. New York REIT has a consensus price target of $9.75, suggesting a potential upside of 37.32%. Given New York REIT’s stronger consensus rating and higher probable upside, analysts plainly believe New York REIT is more favorable than First Potomac Realty Trust.

Insider and Institutional Ownership

93.1% of First Potomac Realty Trust shares are held by institutional investors. Comparatively, 68.3% of New York REIT shares are held by institutional investors. 2.1% of First Potomac Realty Trust shares are held by insiders. Comparatively, 0.2% of New York REIT shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

First Potomac Realty Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.6%. New York REIT does not pay a dividend. First Potomac Realty Trust pays out 58.0% of its earnings in the form of a dividend. New York REIT has raised its dividend for 2 consecutive years.

Profitability

This table compares First Potomac Realty Trust and New York REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Potomac Realty Trust -7.99% -2.35% -0.94%
New York REIT N/A -1.95% -0.86%

Volatility and Risk

First Potomac Realty Trust has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, New York REIT has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Valuation & Earnings

This table compares First Potomac Realty Trust and New York REIT’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
First Potomac Realty Trust N/A N/A N/A $0.69 16.14
New York REIT $160.27 million 7.44 -$82.52 million ($0.50) -14.20

First Potomac Realty Trust has higher revenue, but lower earnings than New York REIT. New York REIT is trading at a lower price-to-earnings ratio than First Potomac Realty Trust, indicating that it is currently the more affordable of the two stocks.

Summary

New York REIT beats First Potomac Realty Trust on 8 of the 13 factors compared between the two stocks.

First Potomac Realty Trust Company Profile

First Potomac Realty Trust (First Potomac) is engaged in ownership, management, redevelopment and development of office and business park properties in the greater Washington, D.C. region. The Company’s segments include Washington, D.C., Maryland, Northern Virginia and Southern Virginia. The Company conducts its business through First Potomac Realty Investment Limited Partnership, its operating partnership. The Company’s portfolio consist a mix of single-tenant and multi-tenant office properties, and business parks. The office properties are single-story and multi-story buildings that are primarily for office uses, and business parks consists of buildings with office features combined with some industrial property space. As of December 31, 2016, the Company owned properties totaling 6.7 million square feet and had a non-controlling ownership interest in properties totaling an additional 0.9 million square feet through five unconsolidated joint ventures.

New York REIT Company Profile

New York REIT, Inc. is a real estate investment trust. The Company owns a portfolio of commercial real estate. The Company’s business is primarily conducted through New York Recovery Operating Partnership, L.P. As of December 31, 2016, the Company owned 19 properties, which aggregated 3.3 million rentable square feet. The Company holds interests in properties of various types, such as office, retail, hotel, parking and storage. The Company’s properties include Design Center, 416 Washington Street, 50 Varick Street, 1440 Broadway, One Worldwide Plaza, 256 West 38th Street, 229 West 36th Street, 333 West 34th Street, 367-387 Bleecker Street, 33 West 56th Street (garage) and 350 West 42nd Street.

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