Elme Communities (NYSE:ELME – Get Free Report) and Whitestone REIT (NYSE:WSR – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.
Risk and Volatility
Elme Communities has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Whitestone REIT has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.
Insider and Institutional Ownership
87.9% of Elme Communities shares are held by institutional investors. Comparatively, 69.5% of Whitestone REIT shares are held by institutional investors. 1.2% of Elme Communities shares are held by company insiders. Comparatively, 5.5% of Whitestone REIT 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.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Elme Communities | $239.52 million | 6.33 | -$52.98 million | ($0.15) | -114.87 |
| Whitestone REIT | $152.00 million | 4.87 | $19.18 million | $0.41 | 35.67 |
Whitestone REIT has lower revenue, but higher earnings than Elme Communities. Elme Communities is trading at a lower price-to-earnings ratio than Whitestone REIT, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Elme Communities and Whitestone REIT’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Elme Communities | -5.51% | -1.17% | -0.70% |
| Whitestone REIT | 13.97% | 4.98% | 1.88% |
Dividends
Elme Communities pays an annual dividend of $0.72 per share and has a dividend yield of 4.2%. Whitestone REIT pays an annual dividend of $0.49 per share and has a dividend yield of 3.4%. Elme Communities pays out -480.0% of its earnings in the form of a dividend. Whitestone REIT pays out 119.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Elme Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of current recommendations for Elme Communities and Whitestone REIT, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Elme Communities | 0 | 3 | 1 | 0 | 2.25 |
| Whitestone REIT | 0 | 1 | 3 | 0 | 2.75 |
Elme Communities currently has a consensus target price of $17.33, indicating a potential upside of 0.60%. Whitestone REIT has a consensus target price of $15.00, indicating a potential upside of 2.56%. Given Whitestone REIT’s stronger consensus rating and higher probable upside, analysts clearly believe Whitestone REIT is more favorable than Elme Communities.
Summary
Whitestone REIT beats Elme Communities on 11 of the 16 factors compared between the two stocks.
About Elme Communities
Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.
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.
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