Service Properties Trust (NASDAQ:SVC – Get Free Report) and Alexandria Real Estate Equities (NYSE:ARE – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.
Dividends
Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 2.2%. Alexandria Real Estate Equities pays an annual dividend of $5.28 per share and has a dividend yield of 10.9%. Service Properties Trust pays out -2.4% of its earnings in the form of a dividend. Alexandria Real Estate Equities pays out -213.8% 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. Alexandria Real Estate Equities has raised its dividend for 15 consecutive years. Alexandria Real Estate Equities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Service Properties Trust and Alexandria Real Estate Equities”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Service Properties Trust | $1.90 billion | 0.16 | -$275.53 million | ($1.67) | -1.11 |
| Alexandria Real Estate Equities | $3.12 billion | 2.69 | $322.95 million | ($2.47) | -19.67 |
Alexandria Real Estate Equities has higher revenue and earnings than Service Properties Trust. Alexandria Real Estate Equities is trading at a lower price-to-earnings ratio than Service Properties Trust, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
77.6% of Service Properties Trust shares are held by institutional investors. Comparatively, 96.5% of Alexandria Real Estate Equities shares are held by institutional investors. 1.4% of Service Properties Trust shares are held by company insiders. Comparatively, 1.2% of Alexandria Real Estate Equities shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Service Properties Trust and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Service Properties Trust | -14.83% | -37.94% | -3.97% |
| Alexandria Real Estate Equities | -13.43% | -1.89% | -1.09% |
Analyst Ratings
This is a summary of current ratings and recommmendations for Service Properties Trust and Alexandria Real Estate Equities, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Service Properties Trust | 1 | 3 | 0 | 0 | 1.75 |
| Alexandria Real Estate Equities | 4 | 8 | 4 | 0 | 2.00 |
Service Properties Trust presently has a consensus price target of $2.75, indicating a potential upside of 48.65%. Alexandria Real Estate Equities has a consensus price target of $69.60, indicating a potential upside of 43.25%. Given Service Properties Trust’s higher possible upside, analysts clearly believe Service Properties Trust is more favorable than Alexandria Real Estate Equities.
Volatility and Risk
Service Properties Trust has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.
Summary
Alexandria Real Estate Equities beats Service Properties Trust on 12 of the 17 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 Alexandria Real Estate Equities
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.
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