Critical Survey: Apartment Income REIT (NYSE:AIRC) and Net Lease Office Properties (NYSE:NLOP)

Apartment Income REIT (NYSE:AIRC) and Net Lease Office Properties (NYSE:NLOP) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Institutional & Insider Ownership

98.1% of Apartment Income REIT shares are held by institutional investors. Comparatively, 58.3% of Net Lease Office Properties shares are held by institutional investors. 1.0% of Apartment Income REIT shares are held by 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.

Dividends

Apartment Income REIT pays an annual dividend of $1.80 per share and has a dividend yield of 4.6%. Net Lease Office Properties pays an annual dividend of $0.34 per share and has a dividend yield of 1.3%. Apartment Income REIT pays out 42.3% of its earnings in the form of a dividend.

Profitability

This table compares Apartment Income REIT and Net Lease Office Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apartment Income REIT	79.54%	25.86%	10.17%
Net Lease Office Properties	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings and target prices for Apartment Income REIT and Net Lease Office Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apartment Income REIT	0	8	1	0	2.11
Net Lease Office Properties	0	0	1	0	3.00

Apartment Income REIT presently has a consensus target price of $36.59, suggesting a potential downside of 6.38%. Net Lease Office Properties has a consensus target price of $46.00, suggesting a potential upside of 82.39%. Given Net Lease Office Properties’ stronger consensus rating and higher probable upside, analysts clearly believe Net Lease Office Properties is more favorable than Apartment Income REIT.

Valuation & Earnings

This table compares Apartment Income REIT and Net Lease Office Properties’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apartment Income REIT	$820.04 million	6.91	$635.10 million	$4.26	9.17
Net Lease Office Properties	$174.96 million	2.13	-$131.75 million	N/A	N/A

Apartment Income REIT has higher revenue and earnings than Net Lease Office Properties.

Summary

Apartment Income REIT beats Net Lease Office Properties on 9 of the 12 factors compared between the two stocks.

About Apartment Income REIT

Apartment Income REIT Corp (NYSE: AIRC) is a publicly traded, self-administered real estate investment trust (REIT). AIR's portfolio comprises 76 communities totaling 27,010 apartment homes located in 10 states and the District of Columbia. AIR offers a simple, predictable business model with focus on what we call the AIR Edge, the cumulative result of our focus on resident selection, satisfaction, and retention, as well as relentless innovation in delivering best-in-class property management. The AIR Edge is a durable operating advantage in driving organic growth, as well as making possible the opportunity for excess returns for properties new to AIR's platform.

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.