Critical Analysis: Global Medical REIT (NYSE:XRN) & SL Green Realty (NYSE:SLG)

Global Medical REIT (NYSE:XRN) and SL Green Realty (NYSE:SLG) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Risk & Volatility

Global Medical REIT has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, SL Green Realty has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Dividends

Global Medical REIT pays an annual dividend of $3.00 per share and has a dividend yield of 8.8%. SL Green Realty pays an annual dividend of $2.47 per share and has a dividend yield of 5.7%. Global Medical REIT pays out -270.3% of its earnings in the form of a dividend. SL Green Realty pays out -98.4% 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. SL Green Realty has raised its dividend for 1 consecutive years. Global Medical REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Global Medical REIT and SL Green Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Medical REIT	-6.06%	-2.19%	-0.73%
SL Green Realty	-15.77%	-4.06%	-1.42%

Analyst Recommendations

This is a breakdown of current recommendations for Global Medical REIT and SL Green Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Medical REIT	1	3	2	1	2.43
SL Green Realty	2	9	8	0	2.32

Global Medical REIT currently has a consensus target price of $39.50, suggesting a potential upside of 15.90%. SL Green Realty has a consensus target price of $51.15, suggesting a potential upside of 18.97%. Given SL Green Realty’s higher probable upside, analysts clearly believe SL Green Realty is more favorable than Global Medical REIT.

Earnings and Valuation

This table compares Global Medical REIT and SL Green Realty”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Medical REIT	$148.21 million	3.04	-$5.84 million	($1.11)	-30.70
SL Green Realty	$1.00 billion	3.06	-$88.28 million	($2.51)	-17.13

Global Medical REIT has higher earnings, but lower revenue than SL Green Realty. Global Medical REIT is trading at a lower price-to-earnings ratio than SL Green Realty, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

57.5% of Global Medical REIT shares are held by institutional investors. Comparatively, 90.0% of SL Green Realty shares are held by institutional investors. 8.9% of Global Medical REIT shares are held by insiders. Comparatively, 5.0% of SL Green Realty shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Global Medical REIT beats SL Green Realty on 10 of the 18 factors compared between the two stocks.

About Global Medical REIT

Global Medical REIT Inc. (GMRE) is a net-lease medical office real estate investment trust (REIT) that owns and acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems.

About SL Green Realty

3SL Green Realty Corp., Manhattan’s largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of June 30, 2022, SL Green held interests in 64 buildings totaling 34.4 million square feet. This included ownership interests in 26.3 million square feet of Manhattan buildings and 7.2 million square feet securing debt and preferred equity investments.