Financial Review: Retail Opportunity Investments (NASDAQ:ROIC) vs. Equity Commonwealth (NYSE:EQC)

Equity Commonwealth (NYSE:EQC) and Retail Opportunity Investments (NASDAQ:ROIC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Equity Commonwealth and Retail Opportunity Investments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity Commonwealth	82.00%	2.09%	1.96%
Retail Opportunity Investments	17.38%	4.32%	1.96%

Analyst Ratings

This is a breakdown of current ratings and target prices for Equity Commonwealth and Retail Opportunity Investments, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Commonwealth	0	0	0	0	0.00
Retail Opportunity Investments	1	6	0	0	1.86

Retail Opportunity Investments has a consensus price target of $16.20, suggesting a potential downside of 7.48%. Given Retail Opportunity Investments’ stronger consensus rating and higher probable upside, analysts clearly believe Retail Opportunity Investments is more favorable than Equity Commonwealth.

Institutional & Insider Ownership

96.0% of Equity Commonwealth shares are held by institutional investors. Comparatively, 97.2% of Retail Opportunity Investments shares are held by institutional investors. 2.1% of Equity Commonwealth shares are held by company insiders. Comparatively, 3.0% of Retail Opportunity Investments shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Equity Commonwealth has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Retail Opportunity Investments has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500.

Valuation and Earnings

This table compares Equity Commonwealth and Retail Opportunity Investments”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Commonwealth	$58.43 million	2.90	$91.16 million	$0.39	4.05
Retail Opportunity Investments	$327.73 million	6.89	$34.53 million	$0.46	38.07

Equity Commonwealth has higher earnings, but lower revenue than Retail Opportunity Investments. Equity Commonwealth is trading at a lower price-to-earnings ratio than Retail Opportunity Investments, indicating that it is currently the more affordable of the two stocks.

Summary

Retail Opportunity Investments beats Equity Commonwealth on 10 of the 12 factors compared between the two stocks.

About Equity Commonwealth

Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. EQC's portfolio is comprised of four properties totaling 1.5 million square feet.

About Retail Opportunity Investments

Retail Opportunity Investments Corp. (Nasdaq: ROIC), is a fully integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated, metropolitan markets across the West Coast. As of December 31, 2023, ROIC owned 94 shopping centers encompassing approximately 10.6 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services, S&P Global Ratings and Fitch Ratings, Inc.