Reviewing Postal Realty Trust (NYSE:PSTL) and Orion Office REIT (NYSE:ONL)

Orion Office REIT (NYSE:ONL) and Postal Realty Trust (NYSE:PSTL) are both small-cap real estate companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Institutional & Insider Ownership

79.9% of Orion Office REIT shares are held by institutional investors. Comparatively, 57.9% of Postal Realty Trust shares are held by institutional investors. 1.6% of Orion Office REIT shares are held by company insiders. Comparatively, 12.5% of Postal Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Orion Office REIT and Postal Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orion Office REIT	-65.66%	-14.85%	-7.95%
Postal Realty Trust	16.42%	4.63%	2.22%

Analyst Ratings

This is a summary of recent recommendations and price targets for Orion Office REIT and Postal Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion Office REIT	1	0	1	0	2.00
Postal Realty Trust	0	2	6	0	2.75

Orion Office REIT presently has a consensus price target of $3.50, indicating a potential upside of 39.17%. Postal Realty Trust has a consensus price target of $25.38, indicating a potential upside of 7.69%. Given Orion Office REIT’s higher possible upside, analysts plainly believe Orion Office REIT is more favorable than Postal Realty Trust.

Valuation & Earnings

This table compares Orion Office REIT and Postal Realty Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion Office REIT	$147.65 million	0.97	-$139.31 million	($1.69)	-1.49
Postal Realty Trust	$95.82 million	6.79	$14.15 million	$0.54	43.64

Postal Realty Trust has lower revenue, but higher earnings than Orion Office REIT. Orion Office REIT is trading at a lower price-to-earnings ratio than Postal Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Orion Office REIT pays an annual dividend of $0.08 per share and has a dividend yield of 3.2%. Postal Realty Trust pays an annual dividend of $0.98 per share and has a dividend yield of 4.2%. Orion Office REIT pays out -4.7% of its earnings in the form of a dividend. Postal Realty Trust pays out 181.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Postal Realty Trust has increased its dividend for 3 consecutive years. Postal Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Orion Office REIT has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500. Comparatively, Postal Realty Trust has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Summary

Postal Realty Trust beats Orion Office REIT on 12 of the 17 factors compared between the two stocks.

About Orion Office REIT

Orion Office REIT specializes in the ownership, acquisition and management of a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S. The portfolio is leased primarily on a single-tenant net lease basis to creditworthy tenants. The company's team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.

About Postal Realty Trust

Postal Realty Trust, Inc. (NYSE: PSTL) is an internally managed real estate investment trust that owns properties primarily leased to the United States Postal Service ("USPS"). PSTL is focused on acquiring the network of USPS properties, which provide a critical element of the nation's logistics infrastructure that facilitates cost effective and efficient last-mile delivery solutions. As of December 31, 2023, PSTL owned 1,509 properties (including two properties accounted for as financing leases) located in 49 states and one territory comprising approximately 5.9 million net leasable interior square feet. Subsequent to quarter-end and through February 23, 2024, PSTL closed on eight additional properties comprising approximately 33,000 net leasable interior square feet.