Net Lease Office Properties (NYSE:NLOP – Get Free Report) and Annaly Capital Management (NYSE:NLY – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
58.3% of Net Lease Office Properties shares are held by institutional investors. Comparatively, 51.6% of Annaly Capital Management shares are held by institutional investors. 0.2% of Annaly Capital Management shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of recent recommendations for Net Lease Office Properties and Annaly Capital Management, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Net Lease Office Properties | 0 | 0 | 1 | 0 | 3.00 |
| Annaly Capital Management | 0 | 2 | 8 | 0 | 2.80 |
Profitability
This table compares Net Lease Office Properties and Annaly Capital Management’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Net Lease Office Properties | -122.90% | -30.16% | -17.58% |
| Annaly Capital Management | 20.70% | 14.95% | 1.60% |
Earnings & Valuation
This table compares Net Lease Office Properties and Annaly Capital Management”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Net Lease Office Properties | $142.25 million | 3.18 | -$131.75 million | ($6.19) | -4.93 |
| Annaly Capital Management | $1.20 billion | 10.46 | $1.00 billion | $1.59 | 13.63 |
Annaly Capital Management has higher revenue and earnings than Net Lease Office Properties. Net Lease Office Properties is trading at a lower price-to-earnings ratio than Annaly Capital Management, indicating that it is currently the more affordable of the two stocks.
Dividends
Net Lease Office Properties pays an annual dividend of $0.34 per share and has a dividend yield of 1.1%. Annaly Capital Management pays an annual dividend of $2.60 per share and has a dividend yield of 12.0%. Net Lease Office Properties pays out -5.5% of its earnings in the form of a dividend. Annaly Capital Management pays out 163.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility and Risk
Net Lease Office Properties has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Annaly Capital Management has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.
Summary
Annaly Capital Management beats Net Lease Office Properties on 12 of the 16 factors compared between the two stocks.
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.
About Annaly Capital Management
Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance. The company invests in agency mortgage-backed securities collateralized by residential mortgages; non-agency residential whole loans and securitized products within the residential and commercial markets; mortgage servicing rights; agency commercial mortgage-backed securities; to-be-announced forward contracts; residential mortgage loans; and agency or private label credit risk transfer securities. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was incorporated in 1996 and is based in New York, New York.
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