Head to Head Analysis: SL Green Realty (NYSE:SLG) versus VEREIT (NYSE:VER)


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SL Green Realty (NYSE:SLG) and VEREIT (NYSE:VER) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Risk & Volatility

SL Green Realty has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, VEREIT has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Dividends

SL Green Realty pays an annual dividend of $3.64 per share and has a dividend yield of 5.8%. VEREIT pays an annual dividend of $1.54 per share and has a dividend yield of 4.3%. SL Green Realty pays out 52.0% of its earnings in the form of a dividend. VEREIT pays out 223.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty has raised its dividend for 1 consecutive years. SL Green Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for SL Green Realty and VEREIT, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SL Green Realty 0 10 2 0 2.17
VEREIT 0 4 3 0 2.43

SL Green Realty currently has a consensus price target of $65.07, suggesting a potential upside of 4.43%. VEREIT has a consensus price target of $39.42, suggesting a potential upside of 10.81%. Given VEREIT’s stronger consensus rating and higher possible upside, analysts plainly believe VEREIT is more favorable than SL Green Realty.

Profitability

This table compares SL Green Realty and VEREIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SL Green Realty 19.90% 4.21% 1.81%
VEREIT -43.35% -7.49% -3.71%

Earnings & Valuation

This table compares SL Green Realty and VEREIT’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SL Green Realty $1.24 billion 3.65 $281.35 million $7.00 8.90
VEREIT $1.24 billion 6.28 -$300.35 million $0.69 51.55

SL Green Realty has higher revenue and earnings than VEREIT. SL Green Realty is trading at a lower price-to-earnings ratio than VEREIT, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

99.5% of SL Green Realty shares are owned by institutional investors. Comparatively, 94.5% of VEREIT shares are owned by institutional investors. 4.0% of SL Green Realty shares are owned by insiders. Comparatively, 0.3% of VEREIT shares are owned by 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.

Summary

SL Green Realty beats VEREIT on 13 of the 17 factors compared between the two stocks.

About SL Green Realty

SL Green Realty Corp., an S&P 500 company and Manhattan's largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of September 30, 2020, SL Green held interests in 93 buildings totaling 40.6 million square feet. This included ownership interests in 29.2 million square feet of Manhattan buildings and 10.3 million square feet securing debt and preferred equity investments.

About VEREIT

VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. The Company has total real estate investments of $14.6 billion including approximately 3,800 properties and 88.9 million square feet. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. VEREIT is a publicly traded Maryland corporation listed on the New York Stock Exchange. VEREIT uses, and intends to continue to use, its Investor Relations website, which can be found at www.VEREIT.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.

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