Critical Review: Getty Realty (NYSE:GTY) & Net Lease Office Properties (NYSE:NLOP)

Net Lease Office Properties (NYSE:NLOP) and Getty Realty (NYSE:GTY) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Volatility and Risk

Net Lease Office Properties has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Getty Realty has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Earnings & Valuation

This table compares Net Lease Office Properties and Getty Realty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Net Lease Office Properties	$142.25 million	2.15	-$91.47 million	($12.22)	-1.69
Getty Realty	$203.39 million	8.09	$71.06 million	$1.28	22.26

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Net Lease Office Properties and Getty Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Net Lease Office Properties	1	0	1	0	2.00
Getty Realty	0	3	3	0	2.50

Net Lease Office Properties currently has a consensus target price of $46.00, suggesting a potential upside of 122.62%. Getty Realty has a consensus target price of $31.80, suggesting a potential upside of 11.58%. Given Net Lease Office Properties’ higher possible upside, equities analysts clearly believe Net Lease Office Properties is more favorable than Getty Realty.

Institutional & Insider Ownership

58.3% of Net Lease Office Properties shares are owned by institutional investors. Comparatively, 85.1% of Getty Realty shares are owned by institutional investors. 0.7% of Net Lease Office Properties shares are owned by company insiders. Comparatively, 8.8% of Getty Realty shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Net Lease Office Properties and Getty Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Net Lease Office Properties	-156.16%	-34.31%	-26.04%
Getty Realty	34.76%	7.60%	3.72%

Summary

Getty Realty beats Net Lease Office Properties on 13 of the 14 factors compared between the two stocks.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.

About Getty Realty

Getty Realty Corp. is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. As of December 31, 2023, the Company’s portfolio included 1,093 freestanding properties located in 40 states across the United States and Washington, D.C.