Critical Review: Global Medical REIT (NYSE:XRN) & Whitestone REIT (NYSE:WSR)

Whitestone REIT (NYSE:WSR) and Global Medical REIT (NYSE:XRN) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Dividends

Whitestone REIT pays an annual dividend of $0.57 per share and has a dividend yield of 3.5%. Global Medical REIT pays an annual dividend of $3.00 per share and has a dividend yield of 9.1%. Whitestone REIT pays out 60.0% of its earnings in the form of a dividend. Global Medical REIT pays out -333.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Whitestone REIT has raised its dividend for 5 consecutive years. Global Medical REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

69.5% of Whitestone REIT shares are owned by institutional investors. Comparatively, 57.5% of Global Medical REIT shares are owned by institutional investors. 3.2% of Whitestone REIT shares are owned by company insiders. Comparatively, 8.5% of Global Medical REIT shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Whitestone REIT and Global Medical REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Whitestone REIT	31.04%	11.23%	4.34%
Global Medical REIT	-4.85%	-1.64%	-0.57%

Analyst Ratings

This is a breakdown of current ratings and price targets for Whitestone REIT and Global Medical REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Whitestone REIT	0	1	6	1	3.00
Global Medical REIT	0	3	2	1	2.67

Whitestone REIT currently has a consensus target price of $16.80, indicating a potential upside of 4.32%. Global Medical REIT has a consensus target price of $42.00, indicating a potential upside of 27.43%. Given Global Medical REIT’s higher possible upside, analysts plainly believe Global Medical REIT is more favorable than Whitestone REIT.

Volatility & Risk

Whitestone REIT has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Global Medical REIT has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Earnings & Valuation

This table compares Whitestone REIT and Global Medical REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Whitestone REIT	$160.86 million	5.15	$49.93 million	$0.95	16.95
Global Medical REIT	$148.21 million	2.94	-$5.84 million	($0.90)	-36.62

Whitestone REIT has higher revenue and earnings than Global Medical REIT. Global Medical REIT is trading at a lower price-to-earnings ratio than Whitestone REIT, indicating that it is currently the more affordable of the two stocks.

Summary

Whitestone REIT beats Global Medical REIT on 12 of the 17 factors compared between the two stocks.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy.

About Global Medical REIT

Global Medical REIT Inc. (GMRE) is a net-lease medical office real estate investment trust (REIT) that owns and acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems.