Contrasting Whitestone REIT (NYSE:WSR) and Service Properties Trust (NASDAQ:SVC)

Whitestone REIT (NYSE:WSR) and Service Properties Trust (NASDAQ:SVC) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and target prices for Whitestone REIT and Service Properties Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Whitestone REIT	0	1	3	0	2.75
Service Properties Trust	1	0	1	0	2.00

Whitestone REIT currently has a consensus target price of $15.67, suggesting a potential upside of 15.62%. Service Properties Trust has a consensus target price of $5.38, suggesting a potential upside of 107.53%. Given Service Properties Trust’s higher possible upside, analysts plainly believe Service Properties Trust is more favorable than Whitestone REIT.

Dividends

Whitestone REIT pays an annual dividend of $0.54 per share and has a dividend yield of 4.0%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.5%. Whitestone REIT pays out 131.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Service Properties Trust pays out -2.7% of its earnings in the form of a dividend.

Insider and Institutional Ownership

69.5% of Whitestone REIT shares are owned by institutional investors. Comparatively, 77.6% of Service Properties Trust shares are owned by institutional investors. 5.5% of Whitestone REIT shares are owned by company insiders. Comparatively, 1.4% of Service Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Whitestone REIT and Service Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Whitestone REIT	13.97%	4.98%	1.88%
Service Properties Trust	-12.87%	-22.67%	-3.37%

Valuation & Earnings

This table compares Whitestone REIT and Service Properties Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Whitestone REIT	$152.00 million	4.51	$19.18 million	$0.41	33.05
Service Properties Trust	$1.88 billion	0.23	-$32.78 million	($1.47)	-1.76

Whitestone REIT has higher earnings, but lower revenue than Service Properties Trust. Service Properties Trust is trading at a lower price-to-earnings ratio than Whitestone REIT, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Whitestone REIT has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Service Properties Trust has a beta of 2.19, meaning that its stock price is 119% more volatile than the S&P 500.

Summary

Whitestone REIT beats Service Properties Trust on 11 of the 16 factors compared between the two stocks.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.