COPT Defense Properties (NYSE:CDP) versus Service Properties Trust (NASDAQ:SVC) Critical Comparison

Service Properties Trust (NASDAQ:SVC) and COPT Defense Properties (NYSE:CDP) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Volatility & Risk

Service Properties Trust has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500. Comparatively, COPT Defense Properties has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Institutional & Insider Ownership

77.6% of Service Properties Trust shares are held by institutional investors. 1.4% of Service Properties Trust shares are held by company insiders. Comparatively, 1.4% of COPT Defense Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Service Properties Trust and COPT Defense Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Service Properties Trust	$1.89 billion	0.19	-$275.53 million	($1.67)	-1.30
COPT Defense Properties	$750.00 million	4.33	$138.93 million	$1.33	21.62

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

Analyst Ratings

This is a summary of current recommendations and price targets for Service Properties Trust and COPT Defense Properties, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Service Properties Trust	2	2	0	0	1.50
COPT Defense Properties	0	2	6	0	2.75

Service Properties Trust presently has a consensus target price of $2.75, suggesting a potential upside of 26.38%. COPT Defense Properties has a consensus target price of $33.75, suggesting a potential upside of 17.35%. Given Service Properties Trust’s higher possible upside, equities research analysts clearly believe Service Properties Trust is more favorable than COPT Defense Properties.

Profitability

This table compares Service Properties Trust and COPT Defense Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Service Properties Trust	-14.73%	-34.61%	-3.95%
COPT Defense Properties	19.23%	9.38%	3.39%

Dividends

Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.8%. COPT Defense Properties pays an annual dividend of $1.22 per share and has a dividend yield of 4.2%. Service Properties Trust pays out -2.4% of its earnings in the form of a dividend. COPT Defense Properties pays out 91.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

COPT Defense Properties beats Service Properties Trust on 10 of the 16 factors compared between the two stocks.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.

About COPT Defense Properties

COPT Defense Properties is a real estate investment trust. It acquires, develops, manages, sells, and leases out office properties and data centers. The firm operates through the following segments: Defense/Information Technology Locations, Regional Office, Wholesale Data Center, and Other. The company was founded on January 22,1988 and is headquartered in Columbia, MD.