Head to Head Analysis: Net Lease Office Properties (NYSE:NLOP) and Alexander’s (NYSE:ALX)

Alexander’s (NYSE:ALX) and Net Lease Office Properties (NYSE:NLOP) are both small-cap real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Earnings & Valuation

This table compares Alexander’s and Net Lease Office Properties”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander’s	$213.18 million	6.30	$28.22 million	$33.05	7.95
Net Lease Office Properties	$75.91 million	2.18	-$145.26 million	($3.06)	-3.65

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

Institutional and Insider Ownership

32.0% of Alexander’s shares are owned by institutional investors. Comparatively, 58.3% of Net Lease Office Properties shares are owned by institutional investors. 26.4% of Alexander’s shares are owned by company insiders. Comparatively, 0.7% of Net Lease Office Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alexander’s	79.06%	123.09%	14.43%
Net Lease Office Properties	-59.82%	-16.92%	-12.66%

Volatility & Risk

Alexander’s has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Net Lease Office Properties has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Alexander’s and Net Lease Office Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander’s	1	0	1	1	2.67
Net Lease Office Properties	1	0	0	0	1.00

Alexander’s currently has a consensus price target of $212.00, suggesting a potential downside of 19.30%. Given Alexander’s’ stronger consensus rating and higher probable upside, equities analysts clearly believe Alexander’s is more favorable than Net Lease Office Properties.

Dividends

Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 6.9%. Net Lease Office Properties pays an annual dividend of $0.34 per share and has a dividend yield of 3.0%. Alexander’s pays out 54.5% of its earnings in the form of a dividend. Net Lease Office Properties pays out -11.1% 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. Alexander’s has increased its dividend for 1 consecutive years. Alexander’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Alexander’s beats Net Lease Office Properties on 16 of the 18 factors compared between the two stocks.

About Alexander’s

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.

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.