Critical Survey: Alexander’s (NYSE:ALX) & Net Lease Office Properties (NYSE:NLOP)

Net Lease Office Properties (NYSE:NLOP) and Alexander’s (NYSE:ALX) are both small-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Profitability

This table compares Net Lease Office Properties and Alexander’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Net Lease Office Properties	-59.82%	-16.92%	-12.66%
Alexander’s	79.06%	123.09%	14.43%

Valuation and Earnings

This table compares Net Lease Office Properties and Alexander’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Net Lease Office Properties	$118.92 million	1.37	-$145.26 million	($3.06)	-3.59
Alexander’s	$213.18 million	6.28	$28.22 million	$33.05	7.92

Alexander’s has higher revenue and earnings than Net Lease Office Properties. Net Lease Office Properties is trading at a lower price-to-earnings ratio than Alexander’s, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Net Lease Office Properties has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Alexander’s has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Institutional & Insider Ownership

58.3% of Net Lease Office Properties shares are owned by institutional investors. Comparatively, 32.0% of Alexander’s shares are owned by institutional investors. 0.7% of Net Lease Office Properties shares are owned by insiders. Comparatively, 26.4% of Alexander’s shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Net Lease Office Properties and Alexander’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Net Lease Office Properties	1	0	0	0	1.00
Alexander’s	1	0	1	1	2.67

Alexander’s has a consensus price target of $212.00, suggesting a potential downside of 19.05%. Given Alexander’s’ stronger consensus rating and higher possible upside, analysts clearly believe Alexander’s is more favorable than Net Lease Office Properties.

Summary

Alexander’s beats Net Lease Office Properties on 14 of the 15 factors compared between the two stocks.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.

About Alexander’s

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.