Critical Contrast: Broadstone Net Lease (NYSE:BNL) and Net Lease Office Properties (NYSE:NLOP)

Net Lease Office Properties (NYSE:NLOP) and Broadstone Net Lease (NYSE:BNL) are both real estate companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Profitability

This table compares Net Lease Office Properties and Broadstone Net Lease’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Net Lease Office Properties	-59.82%	-16.92%	-12.66%
Broadstone Net Lease	30.61%	4.83%	2.54%

Analyst Ratings

This is a breakdown of current ratings and price targets for Net Lease Office Properties and Broadstone Net Lease, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Net Lease Office Properties	1	0	0	0	1.00
Broadstone Net Lease	0	4	7	0	2.64

Broadstone Net Lease has a consensus target price of $22.78, indicating a potential upside of 7.80%. Given Broadstone Net Lease’s stronger consensus rating and higher possible upside, analysts plainly believe Broadstone Net Lease is more favorable than Net Lease Office Properties.

Risk and Volatility

Net Lease Office Properties has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Broadstone Net Lease has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Institutional & Insider Ownership

58.3% of Net Lease Office Properties shares are held by institutional investors. Comparatively, 89.1% of Broadstone Net Lease shares are held by institutional investors. 0.7% of Net Lease Office Properties shares are held by company insiders. Comparatively, 1.0% of Broadstone Net Lease shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Net Lease Office Properties and Broadstone Net Lease”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Net Lease Office Properties	$118.92 million	1.44	-$145.26 million	($3.06)	-3.77
Broadstone Net Lease	$454.14 million	8.93	$96.50 million	$0.76	27.80

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

Summary

Broadstone Net Lease beats Net Lease Office Properties on 14 of the 14 factors compared between the two stocks.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.