Comparing Gladstone Commercial (NASDAQ:GOOD) & EastGroup Properties (NYSE:EGP)

EastGroup Properties (NYSE:EGP) and Gladstone Commercial (NASDAQ:GOOD) are both real estate companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares EastGroup Properties and Gladstone Commercial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EastGroup Properties	40.47%	8.61%	5.59%
Gladstone Commercial	14.55%	14.61%	1.99%

Analyst Ratings

This is a summary of current ratings and recommmendations for EastGroup Properties and Gladstone Commercial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EastGroup Properties	0	6	12	0	2.67
Gladstone Commercial	0	4	0	0	2.00

EastGroup Properties presently has a consensus target price of $221.68, suggesting a potential upside of 11.53%. Gladstone Commercial has a consensus target price of $12.83, suggesting a potential downside of 2.11%. Given EastGroup Properties’ stronger consensus rating and higher possible upside, equities research analysts clearly believe EastGroup Properties is more favorable than Gladstone Commercial.

Insider & Institutional Ownership

92.1% of EastGroup Properties shares are owned by institutional investors. Comparatively, 45.5% of Gladstone Commercial shares are owned by institutional investors. 1.0% of EastGroup Properties shares are owned by company insiders. Comparatively, 1.3% of Gladstone Commercial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares EastGroup Properties and Gladstone Commercial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EastGroup Properties	$721.34 million	14.82	$257.40 million	$5.70	34.87
Gladstone Commercial	$161.34 million	3.93	$19.29 million	$0.26	50.42

EastGroup Properties has higher revenue and earnings than Gladstone Commercial. EastGroup Properties is trading at a lower price-to-earnings ratio than Gladstone Commercial, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

EastGroup Properties has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Gladstone Commercial has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Dividends

EastGroup Properties pays an annual dividend of $6.20 per share and has a dividend yield of 3.1%. Gladstone Commercial pays an annual dividend of $1.20 per share and has a dividend yield of 9.2%. EastGroup Properties pays out 108.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Commercial pays out 461.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EastGroup Properties has increased its dividend for 4 consecutive years.

Summary

EastGroup Properties beats Gladstone Commercial on 12 of the 17 factors compared between the two stocks.

About EastGroup Properties

EastGroup Properties, Inc. (NYSE: EGP), a member of the S&P Mid-Cap 400 and Russell 1000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. The Company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 59 million square feet.

About Gladstone Commercial

Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Including payments through January 2024, Gladstone Commercial has paid 229 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, Gladstone Commercial paid five consecutive quarterly cash distributions. Gladstone Commercial has never skipped or deferred a distribution since its inception in 2003.