Equity Commonwealth (NYSE:EQC) & NNN REIT (NYSE:NNN) Critical Contrast

Equity Commonwealth (NYSE:EQC) and NNN REIT (NYSE:NNN) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares Equity Commonwealth and NNN REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity Commonwealth	82.00%	2.09%	1.96%
NNN REIT	45.65%	9.28%	4.51%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Equity Commonwealth and NNN REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Commonwealth	0	0	0	0	0.00
NNN REIT	1	9	3	0	2.15

NNN REIT has a consensus target price of $44.54, indicating a potential upside of 5.15%. Given NNN REIT’s stronger consensus rating and higher probable upside, analysts plainly believe NNN REIT is more favorable than Equity Commonwealth.

Institutional & Insider Ownership

96.0% of Equity Commonwealth shares are held by institutional investors. Comparatively, 90.0% of NNN REIT shares are held by institutional investors. 2.1% of Equity Commonwealth shares are held by company insiders. Comparatively, 0.8% of NNN REIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Equity Commonwealth has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, NNN REIT has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Valuation & Earnings

This table compares Equity Commonwealth and NNN REIT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Commonwealth	$58.43 million	2.97	$91.16 million	$0.39	4.14
NNN REIT	$869.27 million	9.14	$396.83 million	$2.15	19.70

NNN REIT has higher revenue and earnings than Equity Commonwealth. Equity Commonwealth is trading at a lower price-to-earnings ratio than NNN REIT, indicating that it is currently the more affordable of the two stocks.

Summary

NNN REIT beats Equity Commonwealth on 11 of the 14 factors compared between the two stocks.

About Equity Commonwealth

Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. EQC's portfolio is comprised of four properties totaling 1.5 million square feet.

About NNN REIT

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years.