Analyzing Net Lease Office Properties (NYSE:NLOP) & Chicago Atlantic Real Estate Finance (NASDAQ:REFI)

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Net Lease Office Properties (NYSE:NLOP) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.

Valuation & Earnings

This table compares Chicago Atlantic Real Estate Finance and Net Lease Office Properties’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$57.15 million	5.14	$38.71 million	$1.99	7.72
Net Lease Office Properties	$174.96 million	2.13	-$131.75 million	N/A	N/A

Chicago Atlantic Real Estate Finance has higher earnings, but lower revenue than Net Lease Office Properties.

Insider & Institutional Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are held by institutional investors. Comparatively, 58.3% of Net Lease Office Properties shares are held by institutional investors. 12.3% of Chicago Atlantic Real Estate Finance shares are held by company 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.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Net Lease Office Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	62.74%	13.84%	10.74%
Net Lease Office Properties	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings and target prices for Chicago Atlantic Real Estate Finance and Net Lease Office Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	0	2	1	1	2.75
Net Lease Office Properties	0	0	1	0	3.00

Chicago Atlantic Real Estate Finance currently has a consensus price target of $17.33, indicating a potential upside of 12.77%. Net Lease Office Properties has a consensus price target of $46.00, indicating a potential upside of 82.39%. Given Net Lease Office Properties’ stronger consensus rating and higher probable upside, analysts clearly believe Net Lease Office Properties is more favorable than Chicago Atlantic Real Estate Finance.

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 12.2%. Net Lease Office Properties pays an annual dividend of $0.34 per share and has a dividend yield of 1.3%. Chicago Atlantic Real Estate Finance pays out 94.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Chicago Atlantic Real Estate Finance beats Net Lease Office Properties on 8 of the 13 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

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.