Realty Income Corporation (NYSE: O) and Global Net Lease (NYSE:GNL) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Earnings & Valuation

This table compares Realty Income Corporation and Global Net Lease’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Realty Income Corporation $1.16 billion 13.54 $1.05 billion $1.17 48.99
Global Net Lease $233.85 million 6.13 $180.89 million $0.61 34.92

Realty Income Corporation has higher revenue and earnings than Global Net Lease. Global Net Lease is trading at a lower price-to-earnings ratio than Realty Income Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Realty Income Corporation and Global Net Lease’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Realty Income Corporation 29.19% 5.14% 2.62%
Global Net Lease 16.04% 2.91% 1.35%

Risk & Volatility

Realty Income Corporation has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Global Net Lease has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Realty Income Corporation and Global Net Lease, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Realty Income Corporation 2 5 3 0 2.10
Global Net Lease 0 1 0 0 2.00

Realty Income Corporation currently has a consensus target price of $66.00, indicating a potential upside of 15.14%. Global Net Lease has a consensus target price of $24.45, indicating a potential upside of 14.79%. Given Realty Income Corporation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Realty Income Corporation is more favorable than Global Net Lease.

Institutional & Insider Ownership

68.7% of Realty Income Corporation shares are held by institutional investors. Comparatively, 40.7% of Global Net Lease shares are held by institutional investors. 0.3% of Realty Income Corporation shares are held by company insiders. Comparatively, 0.2% of Global Net Lease shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Realty Income Corporation pays an annual dividend of $2.54 per share and has a dividend yield of 4.4%. Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 10.0%. Realty Income Corporation pays out 217.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Net Lease pays out 349.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income Corporation has increased its dividend for 21 consecutive years.

Summary

Realty Income Corporation beats Global Net Lease on 15 of the 17 factors compared between the two stocks.

About Realty Income Corporation

Realty Income Corporation is a real estate investment trust (REIT). The Company is engaged in in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities. As of December 31, 2016, the Company owned a diversified portfolio of 4,944 properties located in 49 states and Puerto Rico, with over 83.0 million square feet of leasable space leased to 248 different commercial tenants doing business in 47 separate industries. As of December 31, 2016, of the 4,944 properties in the portfolio, 4,920, or 99.5%, were single-tenant properties, and the remaining were multi-tenant properties. As of December 31, 2016, of the 4,920 single-tenant properties, 4,836 were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.8 years.

About Global Net Lease

Global Net Lease, Inc. is a real estate investment trust. The Company’s business consists of owning, managing, operating, leasing, acquiring, investing in and disposing of real estate assets. It owns and invests in commercial properties principally in the United States, the United Kingdom and continental Europe that are then leased to companies. It was formed to primarily acquire a portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant net-leased commercial properties. As of December 31, 2016, it owned 310 properties consisting of 22 million rentable square feet. As of December 31, 2016, its owned 310 properties, including 241 properties located in the United States and Puerto Rico, 43 properties located in the United Kingdom and 26 properties located across continental Europe. It may also originate or acquire first mortgage loans secured by real estate. Its business is conducted through Global Net Lease Operating Partnership, L.P.

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