Saul Centers (NYSE:BFS) versus NETSTREIT (NYSE:NTST) Critical Review

NETSTREIT (NYSE:NTST) and Saul Centers (NYSE:BFS) are both real estate companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Institutional and Insider Ownership

50.0% of Saul Centers shares are owned by institutional investors. 0.7% of NETSTREIT shares are owned by insiders. Comparatively, 51.0% of Saul Centers shares are owned by 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.

Dividends

NETSTREIT pays an annual dividend of $0.90 per share and has a dividend yield of 4.4%. Saul Centers pays an annual dividend of $2.36 per share and has a dividend yield of 7.2%. NETSTREIT pays out 600.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saul Centers pays out 243.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NETSTREIT has raised its dividend for 1 consecutive years. Saul Centers is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

NETSTREIT has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares NETSTREIT and Saul Centers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NETSTREIT	6.35%	0.95%	0.51%
Saul Centers	11.54%	11.97%	1.61%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for NETSTREIT and Saul Centers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NETSTREIT	0	2	13	0	2.87
Saul Centers	0	1	0	0	2.00

NETSTREIT presently has a consensus target price of $23.19, indicating a potential upside of 13.25%. Given NETSTREIT’s stronger consensus rating and higher possible upside, analysts clearly believe NETSTREIT is more favorable than Saul Centers.

Valuation and Earnings

This table compares NETSTREIT and Saul Centers”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NETSTREIT	$195.01 million	10.66	$6.90 million	$0.15	136.53
Saul Centers	$289.84 million	2.79	$37.51 million	$0.97	33.75

Saul Centers has higher revenue and earnings than NETSTREIT. Saul Centers is trading at a lower price-to-earnings ratio than NETSTREIT, indicating that it is currently the more affordable of the two stocks.

Summary

Saul Centers beats NETSTREIT on 11 of the 17 factors compared between the two stocks.

About NETSTREIT

NETSTREIT Corp. is an internally managed real estate investment trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT’s strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.

About Saul Centers

Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio comprised of 61 properties that includes (a) 57 community and neighborhood Shopping Centers and Mixed-Use properties with approximately 9.8 million square feet of leasable area and (b) four land and development properties. Over 85% of the Company’s property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.