Analyzing Global Net Lease (NYSE:GNL) and Alexander’s (NYSE:ALX)

Alexander’s (NYSE:ALX) and Global Net Lease (NYSE:GNL) are both small-cap real estate companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Dividends

Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 6.6%. Global Net Lease pays an annual dividend of $0.76 per share and has a dividend yield of 8.3%. Alexander’s pays out 54.5% of its earnings in the form of a dividend. Global Net Lease pays out -271.4% 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. Global Net Lease is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Alexander’s and Global Net Lease’s 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%
Global Net Lease	-2.94%	-1.00%	-0.37%

Analyst Ratings

This is a summary of current ratings and recommmendations for Alexander’s and Global Net Lease, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander’s	1	0	1	1	2.67
Global Net Lease	0	1	3	1	3.00

Alexander’s presently has a consensus target price of $212.00, suggesting a potential downside of 21.75%. Global Net Lease has a consensus target price of $10.25, suggesting a potential upside of 11.90%. Given Global Net Lease’s stronger consensus rating and higher probable upside, analysts plainly believe Global Net Lease is more favorable than Alexander’s.

Institutional and Insider Ownership

32.0% of Alexander’s shares are owned by institutional investors. Comparatively, 61.2% of Global Net Lease shares are owned by institutional investors. 26.4% of Alexander’s shares are owned by company insiders. Comparatively, 0.6% of Global Net Lease 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.

Risk & Volatility

Alexander’s has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Global Net Lease has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Earnings & Valuation

This table compares Alexander’s and Global Net Lease”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander’s	$213.18 million	6.49	$28.22 million	$33.05	8.20
Global Net Lease	$495.29 million	3.90	-$225.46 million	($0.28)	-32.71

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

Summary

Alexander’s beats Global Net Lease on 9 of the 17 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 Global Net Lease

Global Net Lease, Inc. (NYSE: GNL) is a publicly traded real estate investment trust listed on the NYSE. The firm focused on acquiring a diversified global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States, Western and Northern Europe.