Analyzing Broadstone Net Lease (NYSE:BNL) and Alexander’s (NYSE:ALX)

Alexander’s (NYSE:ALX) and Broadstone Net Lease (NYSE:BNL) are both real estate companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

Volatility & Risk

Alexander’s has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Broadstone Net Lease has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Earnings and Valuation

This table compares Alexander’s and Broadstone Net Lease”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander’s	$213.18 million	6.64	$28.22 million	$33.05	8.38
Broadstone Net Lease	$454.14 million	8.83	$96.50 million	$0.76	27.49

Broadstone Net Lease has higher revenue and earnings than Alexander’s. Alexander’s is trading at a lower price-to-earnings ratio than Broadstone Net Lease, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

32.0% of Alexander’s shares are owned by institutional investors. Comparatively, 89.1% of Broadstone Net Lease shares are owned by institutional investors. 26.4% of Alexander’s shares are owned by company insiders. Comparatively, 1.0% of Broadstone Net Lease shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Alexander’s and Broadstone Net Lease, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander’s	1	0	1	1	2.67
Broadstone Net Lease	0	4	7	0	2.64

Alexander’s currently has a consensus price target of $212.00, indicating a potential downside of 23.43%. Broadstone Net Lease has a consensus price target of $22.78, indicating a potential upside of 9.01%. Given Broadstone Net Lease’s higher possible upside, analysts clearly believe Broadstone Net Lease is more favorable than Alexander’s.

Profitability

This table compares Alexander’s and Broadstone Net Lease’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alexander’s	79.06%	123.09%	14.43%
Broadstone Net Lease	30.61%	4.83%	2.54%

Dividends

Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 6.5%. Broadstone Net Lease pays an annual dividend of $1.17 per share and has a dividend yield of 5.6%. Alexander’s pays out 54.5% of its earnings in the form of a dividend. Broadstone Net Lease pays out 153.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander’s has increased its dividend for 1 consecutive years and Broadstone Net Lease has increased its dividend for 4 consecutive years. Alexander’s is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Alexander’s

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.