Gladstone Commercial (NASDAQ:GOOD) and Lexington Realty Trust (NYSE:LXP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.
Volatility & Risk
Gladstone Commercial has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Lexington Realty Trust has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.
Earnings and Valuation
This table compares Gladstone Commercial and Lexington Realty Trust's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Gladstone Commercial | $114.39 million | 5.99 | $9.63 million | $1.58 | 12.14 |
Lexington Realty Trust | $325.97 million | 9.10 | $279.91 million | $0.80 | 13.36 |
Lexington Realty Trust has higher revenue and earnings than Gladstone Commercial. Gladstone Commercial is trading at a lower price-to-earnings ratio than Lexington Realty Trust, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
55.2% of Gladstone Commercial shares are held by institutional investors. Comparatively, 90.4% of Lexington Realty Trust shares are held by institutional investors. 1.8% of Gladstone Commercial shares are held by insiders. Comparatively, 2.1% of Lexington Realty Trust 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.
Dividends
Gladstone Commercial pays an annual dividend of $1.50 per share and has a dividend yield of 7.8%. Lexington Realty Trust pays an annual dividend of $0.43 per share and has a dividend yield of 4.0%. Gladstone Commercial pays out 94.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lexington Realty Trust pays out 53.8% of its earnings in the form of a dividend. Gladstone Commercial has raised its dividend for 1 consecutive years and Lexington Realty Trust has raised its dividend for 1 consecutive years.
Analyst Ratings
This is a breakdown of current ratings and price targets for Gladstone Commercial and Lexington Realty Trust, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Gladstone Commercial | 0 | 0 | 5 | 0 | 3.00 |
Lexington Realty Trust | 0 | 0 | 2 | 0 | 3.00 |
Gladstone Commercial presently has a consensus target price of $20.75, indicating a potential upside of 8.53%. Lexington Realty Trust has a consensus target price of $12.25, indicating a potential upside of 14.81%. Given Lexington Realty Trust's higher probable upside, analysts plainly believe Lexington Realty Trust is more favorable than Gladstone Commercial.
Profitability
This table compares Gladstone Commercial and Lexington Realty Trust's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Gladstone Commercial | 5.05% | 3.10% | 0.61% |
Lexington Realty Trust | 49.72% | 9.57% | 4.87% |
Summary
Lexington Realty Trust beats Gladstone Commercial on 11 of the 15 factors compared between the two stocks.