Critical Comparison: Orion Office REIT (NYSE:ONL) & JBG SMITH Properties (NYSE:JBGS)

JBG SMITH Properties (NYSE:JBGS) and Orion Office REIT (NYSE:ONL) are both small-cap real estate companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation & Earnings

This table compares JBG SMITH Properties and Orion Office REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JBG SMITH Properties	$498.60 million	1.46	-$139.06 million	($2.61)	-4.76
Orion Office REIT	$147.65 million	1.03	-$139.31 million	($1.69)	-1.58

JBG SMITH Properties has higher revenue and earnings than Orion Office REIT. JBG SMITH Properties is trading at a lower price-to-earnings ratio than Orion Office REIT, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

JBG SMITH Properties has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Orion Office REIT has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Profitability

This table compares JBG SMITH Properties and Orion Office REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JBG SMITH Properties	-29.89%	-13.31%	-3.49%
Orion Office REIT	-65.66%	-14.85%	-7.95%

Dividends

JBG SMITH Properties pays an annual dividend of $0.70 per share and has a dividend yield of 5.6%. Orion Office REIT pays an annual dividend of $0.08 per share and has a dividend yield of 3.0%. JBG SMITH Properties pays out -26.8% of its earnings in the form of a dividend. Orion Office REIT pays out -4.7% 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. JBG SMITH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

98.5% of JBG SMITH Properties shares are held by institutional investors. Comparatively, 79.9% of Orion Office REIT shares are held by institutional investors. 11.9% of JBG SMITH Properties shares are held by company insiders. Comparatively, 1.6% of Orion Office REIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for JBG SMITH Properties and Orion Office REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JBG SMITH Properties	3	0	0	0	1.00
Orion Office REIT	1	0	1	0	2.00

JBG SMITH Properties currently has a consensus price target of $12.50, suggesting a potential upside of 0.58%. Orion Office REIT has a consensus price target of $3.50, suggesting a potential upside of 31.33%. Given Orion Office REIT’s stronger consensus rating and higher possible upside, analysts plainly believe Orion Office REIT is more favorable than JBG SMITH Properties.

Summary

JBG SMITH Properties beats Orion Office REIT on 11 of the 16 factors compared between the two stocks.

About JBG SMITH Properties

JBG SMITH Properties is a real estate investment trust, which engages in owning, operating, investing in, and developing a portfolio of mixed-use properties. It operates through the following segments: Multifamily, Commercial, and Other. The Multifamily segment refers to the commercial buildings with public areas, retail spaces, and walkable streets. The Commercial segment rents to federal government tenants. The Other segment relates to development assets, corporate entities, land assets for which are the ground lessor and the elimination of inter-segment activity. The company was founded on October 27, 2016, and is headquartered in Bethesda, MD.

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.