Critical Comparison: Alexander’s (NYSE:ALX) vs. Essential Properties Realty Trust (NYSE:EPRT)

Essential Properties Realty Trust (NYSE:EPRT) and Alexander’s (NYSE:ALX) are both real estate companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Profitability

This table compares Essential Properties Realty Trust and Alexander’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Essential Properties Realty Trust	43.51%	6.34%	3.81%
Alexander’s	79.06%	123.09%	14.43%

Dividends

Essential Properties Realty Trust pays an annual dividend of $1.28 per share and has a dividend yield of 5.0%. Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 7.4%. Essential Properties Realty Trust pays out 99.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander’s pays out 54.5% of its earnings in the form of a dividend. Essential Properties Realty Trust has increased its dividend for 6 consecutive years and Alexander’s has increased its dividend for 1 consecutive years. Alexander’s is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Essential Properties Realty Trust has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Alexander’s has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Insider and Institutional Ownership

97.0% of Essential Properties Realty Trust shares are owned by institutional investors. Comparatively, 32.0% of Alexander’s shares are owned by institutional investors. 0.8% of Essential Properties Realty Trust shares are owned by company insiders. Comparatively, 26.4% of Alexander’s shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Essential Properties Realty Trust and Alexander’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essential Properties Realty Trust	0	1	9	1	3.00
Alexander’s	1	1	1	0	2.00

Essential Properties Realty Trust currently has a consensus price target of $35.12, indicating a potential upside of 36.14%. Alexander’s has a consensus price target of $192.00, indicating a potential downside of 20.79%. Given Essential Properties Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Essential Properties Realty Trust is more favorable than Alexander’s.

Earnings & Valuation

This table compares Essential Properties Realty Trust and Alexander’s”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essential Properties Realty Trust	$561.22 million	9.94	$253.01 million	$1.29	20.00
Alexander’s	$213.18 million	5.81	$28.22 million	$33.05	7.33

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

Summary

Essential Properties Realty Trust beats Alexander’s on 11 of the 18 factors compared between the two stocks.

About Essential Properties Realty Trust

Essential Properties Realty Trust, Inc., a real estate company, acquires, owns, and manages single-tenant properties in the United States. The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical and dental services, convenience stores, equipment rental, entertainment, early childhood education, grocery, and health and fitness on a long-term basis. As of December 31, 2021, it had a portfolio of 1, 451 properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2016 and is headquartered in Princeton, New Jersey.

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.