TIER REIT (NYSE:TIER) and National Retail Properties (NYSE:NNN) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.
TIER REIT pays an annual dividend of $0.72 per share and has a dividend yield of 3.2%. National Retail Properties pays an annual dividend of $2.00 per share and has a dividend yield of 4.4%. TIER REIT pays out 45.9% of its earnings in the form of a dividend. National Retail Properties pays out 78.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TIER REIT has increased its dividend for 2 consecutive years and National Retail Properties has increased its dividend for 8 consecutive years. National Retail Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
TIER REIT has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, National Retail Properties has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.
This table compares TIER REIT and National Retail Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|National Retail Properties||50.66%||9.50%||4.62%|
Valuation and Earnings
This table compares TIER REIT and National Retail Properties’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TIER REIT||$216.46 million||5.30||$84.28 million||$1.57||14.39|
|National Retail Properties||$584.93 million||12.28||$264.97 million||$2.54||18.02|
National Retail Properties has higher revenue and earnings than TIER REIT. TIER REIT is trading at a lower price-to-earnings ratio than National Retail Properties, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for TIER REIT and National Retail Properties, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|National Retail Properties||1||3||5||0||2.44|
TIER REIT presently has a consensus target price of $24.25, indicating a potential upside of 7.35%. National Retail Properties has a consensus target price of $46.43, indicating a potential upside of 1.46%. Given TIER REIT’s stronger consensus rating and higher possible upside, equities analysts clearly believe TIER REIT is more favorable than National Retail Properties.
Institutional and Insider Ownership
65.0% of TIER REIT shares are held by institutional investors. Comparatively, 90.9% of National Retail Properties shares are held by institutional investors. 1.4% of TIER REIT shares are held by company insiders. Comparatively, 1.0% of National Retail Properties shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
National Retail Properties beats TIER REIT on 11 of the 16 factors compared between the two stocks.
TIER REIT Company Profile
TIER REIT, Inc. is a publicly traded (NYSE: TIER), self-managed, Dallas-based real estate investment trust focused on owning quality, well-managed commercial office properties in dynamic markets throughout the U.S. Our vision is to be the premier owner and operator of best-in-class office properties in TIER1 submarkets, which are primarily higher density and amenity-rich locations within select, high-growth metropolitan areas that offer a walkable experience to various amenities. Our mission is to provide unparalleled, TIER ONE Property Services to our tenants and outsized total return through stock price appreciation and dividend growth to our stockholders.
National Retail Properties Company Profile
National Retail Properties invests primarily in high-quality retail properties subject generally to long term, net leases. As of June 30, 2018, the company owned 2,846 properties in 48 states with a gross leasable area of approximately 29.4 million square feet and with a weighted average remaining lease term of 11.5 years.
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