Critical Contrast: Getty Realty (GTY) and Office Properties Income Trust (OPI)

Getty Realty (NYSE:GTY) and Office Properties Income Trust (NASDAQ:OPI) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Earnings and Valuation

This table compares Getty Realty and Office Properties Income Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Getty Realty $136.11 million 9.53 $47.71 million $1.71 18.56
Office Properties Income Trust $426.56 million 3.05 -$21.88 million $7.95 3.41

Getty Realty has higher earnings, but lower revenue than Office Properties Income Trust. Office Properties Income Trust is trading at a lower price-to-earnings ratio than Getty Realty, indicating that it is currently the more affordable of the two stocks.

Dividends

Getty Realty pays an annual dividend of $1.40 per share and has a dividend yield of 4.4%. Office Properties Income Trust pays an annual dividend of $2.20 per share and has a dividend yield of 8.1%. Getty Realty pays out 81.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Office Properties Income Trust pays out 27.7% of its earnings in the form of a dividend. Getty Realty has increased its dividend for 6 consecutive years. Office Properties Income Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Getty Realty and Office Properties Income Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Getty Realty 35.05% 8.52% 4.34%
Office Properties Income Trust -5.13% -0.93% -0.33%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Getty Realty and Office Properties Income Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Getty Realty 0 0 3 0 3.00
Office Properties Income Trust 1 0 0 0 1.00

Getty Realty presently has a consensus price target of $30.33, suggesting a potential downside of 4.40%. Office Properties Income Trust has a consensus price target of $27.00, suggesting a potential downside of 0.33%. Given Office Properties Income Trust’s higher possible upside, analysts clearly believe Office Properties Income Trust is more favorable than Getty Realty.

Insider and Institutional Ownership

65.6% of Getty Realty shares are held by institutional investors. 19.3% of Getty Realty shares are held by company insiders. Comparatively, 1.7% of Office Properties Income Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Getty Realty has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Office Properties Income Trust has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Summary

Getty Realty beats Office Properties Income Trust on 11 of the 17 factors compared between the two stocks.

About Getty Realty

Getty Realty Corp. is the leading publicly-traded real estate investment trust in the United States specializing in the ownership, leasing and financing of convenience store and gasoline station properties. As of December 31, 2018, the Company owned 859 properties and leased 74 properties from third-party landlords in 30 states across the United States and Washington, D.C.

About Office Properties Income Trust

Office Properties Income Trust is a real estate investment trust, or REIT, which owns buildings primarily leased to single tenants and those with high credit quality characteristics like government entities. In December 2018, our predecessor company Government Properties Income Trust, or GOV, merged with Select Income REIT, or SIR, and the combined company was renamed Office Properties Income Trust, or OPI. Combining the two companies creates a national office REIT with increased scale, enhanced tenant and geographic diversification, a well-laddered lease expiration schedule, a broader investment strategy, and a company with one of the highest percentages of rent paid by investment grade rated tenants in the office sector.

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