Select Income REIT (NASDAQ: SIR) is one of 85 public companies in the “Commercial REITs” industry, but how does it contrast to its peers? We will compare Select Income REIT to related businesses based on the strength of its valuation, profitability, dividends, institutional ownership, risk, earnings and analyst recommendations.

Volatility and Risk

Select Income REIT has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Select Income REIT’s peers have a beta of 0.81, indicating that their average share price is 19% less volatile than the S&P 500.

Institutional & Insider Ownership

48.2% of Select Income REIT shares are owned by institutional investors. Comparatively, 68.7% of shares of all “Commercial REITs” companies are owned by institutional investors. 2.0% of Select Income REIT shares are owned by company insiders. Comparatively, 8.3% of shares of all “Commercial REITs” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Select Income REIT and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Select Income REIT 18.65% 4.18% 1.85%
Select Income REIT Competitors 50.87% 6.60% 3.77%

Dividends

Select Income REIT pays an annual dividend of $2.04 per share and has a dividend yield of 8.5%. Select Income REIT pays out 210.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 4.0% and pay out 205.1% of their earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations for Select Income REIT and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Select Income REIT 0 0 1 0 3.00
Select Income REIT Competitors 626 2461 2125 22 2.29

Select Income REIT presently has a consensus price target of $34.00, suggesting a potential upside of 42.32%. As a group, “Commercial REITs” companies have a potential upside of 6.08%. Given Select Income REIT’s stronger consensus rating and higher possible upside, research analysts clearly believe Select Income REIT is more favorable than its peers.

Earnings & Valuation

This table compares Select Income REIT and its peers revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Select Income REIT N/A N/A 24.63
Select Income REIT Competitors $482.34 million $305.34 million 32.26

Select Income REIT’s peers have higher revenue and earnings than Select Income REIT. Select Income REIT is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Select Income REIT peers beat Select Income REIT on 10 of the 14 factors compared.

Select Income REIT Company Profile

Select Income REIT is a real estate investment trust. The Company is engaged in the ownership of properties that include buildings and leased industrial lands that are primarily net leased to single tenants. As of December 31, 2016, the Company owned 121 properties (362 buildings, leasable land parcels and easements) with approximately 44.8 million rentable square feet. As of December 31, 2016, the Company’s properties consisted of 110 office and industrial properties (133 buildings) with approximately 27.0 million square feet located in 34 states throughout the mainland United States (Mainland Properties), and 11 properties (229 buildings, leasable land parcels and easements) located on the island of Oahu, Hawaii, with approximately 17.8 million rentable square feet that are primarily leased to industrial and commercial tenants (Hawaii Properties). As of December 31, 2016, the Company’s properties were leased to 312 different tenants.

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