Head-To-Head Comparison: Service Properties Trust (NASDAQ:SVC) & Clipper Realty (NYSE:CLPR)

Clipper Realty (NYSE:CLPR) and Service Properties Trust (NASDAQ:SVC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Institutional and Insider Ownership

37.6% of Clipper Realty shares are owned by institutional investors. Comparatively, 77.6% of Service Properties Trust shares are owned by institutional investors. 53.0% of Clipper Realty shares are owned by insiders. Comparatively, 1.4% of Service Properties Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Clipper Realty and Service Properties Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clipper Realty	0	1	0	0	2.00
Service Properties Trust	2	2	0	0	1.50

Service Properties Trust has a consensus price target of $2.75, indicating a potential upside of 39.59%. Given Service Properties Trust’s higher probable upside, analysts clearly believe Service Properties Trust is more favorable than Clipper Realty.

Earnings & Valuation

This table compares Clipper Realty and Service Properties Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clipper Realty	$148.77 million	0.41	-$2.50 million	($1.03)	-3.63
Service Properties Trust	$1.89 billion	0.17	-$275.53 million	($1.67)	-1.18

Clipper Realty has higher earnings, but lower revenue than Service Properties Trust. Clipper Realty is trading at a lower price-to-earnings ratio than Service Properties Trust, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Clipper Realty has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Service Properties Trust has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Profitability

This table compares Clipper Realty and Service Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clipper Realty	-9.53%	N/A	-1.16%
Service Properties Trust	-14.73%	-34.61%	-3.95%

Dividends

Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 10.2%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 2.0%. Clipper Realty pays out -36.9% of its earnings in the form of a dividend. Service Properties Trust pays out -2.4% 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. Clipper Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Clipper Realty beats Service Properties Trust on 10 of the 15 factors compared between the two stocks.

About Clipper Realty

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.