Urban Edge Properties (NASDAQ: GOV) and Government Properties Income Trust (NASDAQ:GOV) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Profitability

This table compares Urban Edge Properties and Government Properties Income Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Urban Edge Properties 19.70% 7.67% 2.77%
Government Properties Income Trust 7.42% 2.16% 0.79%

Volatility and Risk

Urban Edge Properties has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Government Properties Income Trust has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Dividends

Urban Edge Properties pays an annual dividend of $0.88 per share and has a dividend yield of 3.8%. Government Properties Income Trust pays an annual dividend of $1.72 per share and has a dividend yield of 10.1%. Urban Edge Properties pays out 65.7% of its earnings in the form of a dividend. Government Properties Income Trust pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Urban Edge Properties has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares Urban Edge Properties and Government Properties Income Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Urban Edge Properties $407.04 million 6.45 $67.07 million $1.34 17.17
Government Properties Income Trust $316.53 million 5.32 $12.09 million $2.02 8.40

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

Institutional & Insider Ownership

90.7% of Urban Edge Properties shares are held by institutional investors. Comparatively, 58.0% of Government Properties Income Trust shares are held by institutional investors. 4.4% of Urban Edge Properties shares are held by company insiders. Comparatively, 1.3% of Government Properties Income Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Urban Edge Properties and Government Properties Income Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Urban Edge Properties 0 1 0 0 2.00
Government Properties Income Trust 4 1 2 0 1.71

Government Properties Income Trust has a consensus price target of $16.00, indicating a potential downside of 5.72%. Given Government Properties Income Trust’s higher possible upside, analysts clearly believe Government Properties Income Trust is more favorable than Urban Edge Properties.

Summary

Urban Edge Properties beats Government Properties Income Trust on 12 of the 17 factors compared between the two stocks.

About Urban Edge Properties

Urban Edge Properties is a NYSE listed real estate investment trust focused on managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the New York metropolitan region. Urban Edge owns 88 properties totaling 16.3 million square feet of gross leasable area.

About Government Properties Income Trust

GOV is a real estate investment trust, or REIT, which primarily owns properties located throughout the United States that are majority leased to government tenants and office properties in the metropolitan Washington, D.C. market area that are leased to government and private sector tenants. GOV is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, Massachusetts.

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