Critical Comparison: Net Lease Office Properties (NLOP) versus Its Peers

Net Lease Office Properties (NYSE:NLOP) is one of 293 publicly-traded companies in the “Real estate investment trusts” industry, but how does it compare to its peers? We will compare Net Lease Office Properties to related companies based on the strength of its dividends, institutional ownership, analyst recommendations, earnings, profitability, valuation and risk.

Dividends

Net Lease Office Properties pays an annual dividend of $0.34 per share and has a dividend yield of 1.2%. Net Lease Office Properties pays out -5.5% of its earnings in the form of a dividend. As a group, “Real estate investment trusts” companies pay a dividend yield of 4.9% and pay out -4.5% of their earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations for Net Lease Office Properties and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Net Lease Office Properties	0	0	1	0	3.00
Net Lease Office Properties Competitors	4694	15560	15091	448	2.32

Net Lease Office Properties presently has a consensus target price of $46.00, suggesting a potential upside of 61.68%. As a group, “Real estate investment trusts” companies have a potential upside of 22.00%. Given Net Lease Office Properties’ stronger consensus rating and higher probable upside, research analysts clearly believe Net Lease Office Properties is more favorable than its peers.

Insider and Institutional Ownership

58.3% of Net Lease Office Properties shares are owned by institutional investors. Comparatively, 68.7% of shares of all “Real estate investment trusts” companies are owned by institutional investors. 7.0% of shares of all “Real estate investment trusts” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Net Lease Office Properties has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Net Lease Office Properties’ peers have a beta of 1.19, indicating that their average share price is 19% more volatile than the S&P 500.

Valuation & Earnings

This table compares Net Lease Office Properties and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Net Lease Office Properties	$142.25 million	-$131.75 million	-4.60
Net Lease Office Properties Competitors	$989.39 million	$145.17 million	22.70

Net Lease Office Properties’ peers have higher revenue and earnings than Net Lease Office Properties. Net Lease Office Properties is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Net Lease Office Properties	-122.90%	-30.16%	-17.58%
Net Lease Office Properties Competitors	-2.42%	-3.46%	1.20%

Summary

Net Lease Office Properties peers beat Net Lease Office Properties on 11 of the 15 factors compared.

Net Lease Office Properties Company Profile

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.