Critical Analysis: Independence Realty Trust (NYSE:IRT) and Office Properties Income Trust (NASDAQ:OPI)

Office Properties Income Trust (NASDAQ:OPI) and Independence Realty Trust (NYSE:IRT) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Volatility & Risk

Office Properties Income Trust has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500. Comparatively, Independence Realty Trust has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Dividends

Office Properties Income Trust pays an annual dividend of $0.04 per share and has a dividend yield of 250.0%. Independence Realty Trust pays an annual dividend of $0.68 per share and has a dividend yield of 4.1%. Office Properties Income Trust pays out -0.8% of its earnings in the form of a dividend. Independence Realty Trust pays out 680.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Independence Realty Trust has increased its dividend for 3 consecutive years. Office Properties Income Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Office Properties Income Trust and Independence Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Office Properties Income Trust	$466.97 million	0.00	-$136.11 million	($4.90)	0.00
Independence Realty Trust	$640.03 million	6.17	$39.29 million	$0.10	165.25

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Office Properties Income Trust and Independence Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Office Properties Income Trust	1	0	0	0	1.00
Independence Realty Trust	0	3	6	0	2.67

Independence Realty Trust has a consensus target price of $21.56, indicating a potential upside of 30.48%. Given Independence Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Independence Realty Trust is more favorable than Office Properties Income Trust.

Institutional and Insider Ownership

64.4% of Office Properties Income Trust shares are owned by institutional investors. Comparatively, 88.3% of Independence Realty Trust shares are owned by institutional investors. 1.8% of Office Properties Income Trust shares are owned by company insiders. Comparatively, 0.6% of Independence Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Office Properties Income Trust and Independence Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Office Properties Income Trust	-62.99%	-25.56%	-8.02%
Independence Realty Trust	3.42%	0.62%	0.37%

Summary

Independence Realty Trust beats Office Properties Income Trust on 13 of the 17 factors compared between the two stocks.

About Office Properties Income Trust

Office Properties Income Trust is a real estate investment trust. It owns, operates, and leases office buildings to single tenants and multi-tenant buildings. The company was founded on February 17, 2009 and is headquartered in Newton, MA.

About Independence Realty Trust

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.