Critical Review: Terreno Realty (NYSE:TRNO) & LXP Industrial Trust (NYSE:LXP)

LXP Industrial Trust (NYSE:LXP) and Terreno Realty (NYSE:TRNO) are both mid-cap real estate companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Volatility & Risk

LXP Industrial Trust has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Terreno Realty has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Profitability

This table compares LXP Industrial Trust and Terreno Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LXP Industrial Trust	34.31%	6.29%	3.45%
Terreno Realty	77.22%	9.21%	7.07%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for LXP Industrial Trust and Terreno Realty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LXP Industrial Trust	0	5	3	0	2.38
Terreno Realty	2	2	10	1	2.67

LXP Industrial Trust currently has a consensus target price of $57.40, suggesting a potential downside of 6.17%. Terreno Realty has a consensus target price of $73.50, suggesting a potential upside of 10.62%. Given Terreno Realty’s stronger consensus rating and higher possible upside, analysts plainly believe Terreno Realty is more favorable than LXP Industrial Trust.

Earnings and Valuation

This table compares LXP Industrial Trust and Terreno Realty”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LXP Industrial Trust	$350.23 million	10.30	$113.16 million	$1.94	31.53
Terreno Realty	$476.38 million	15.20	$402.99 million	$3.73	17.81

Terreno Realty has higher revenue and earnings than LXP Industrial Trust. Terreno Realty is trading at a lower price-to-earnings ratio than LXP Industrial Trust, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

93.5% of LXP Industrial Trust shares are owned by institutional investors. 2.8% of LXP Industrial Trust shares are owned by company insiders. Comparatively, 1.9% of Terreno Realty 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.

Dividends

LXP Industrial Trust pays an annual dividend of $2.80 per share and has a dividend yield of 4.6%. Terreno Realty pays an annual dividend of $2.28 per share and has a dividend yield of 3.4%. LXP Industrial Trust pays out 144.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Terreno Realty pays out 61.1% of its earnings in the form of a dividend. LXP Industrial Trust has raised its dividend for 3 consecutive years and Terreno Realty has raised its dividend for 5 consecutive years.

Summary

Terreno Realty beats LXP Industrial Trust on 14 of the 18 factors compared between the two stocks.

About LXP Industrial Trust

LXP Industrial Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) focused on single-tenant industrial real estate investments across the United States. LXP seeks to expand its industrial portfolio through acquisitions, build-to-suit transactions, sale-leaseback transactions, development projects and other transactions.

About Terreno Realty

Terreno Realty Corporation (Terreno, and together with its subsidiaries, the Company) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. All square feet, acres, occupancy and number of properties disclosed in these notes to the consolidated financial statements are unaudited. As of December 31, 2023, the Company owned 259 buildings aggregating approximately 16.0 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development. The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (REIT) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year ended December 31, 2010.