Financial Survey: American Assets Trust (NYSE:AAT) & Net Lease Office Properties (NYSE:NLOP)

Net Lease Office Properties (NYSE:NLOP) and American Assets Trust (NYSE:AAT) are both small-cap real estate companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

58.3% of Net Lease Office Properties shares are held by institutional investors. Comparatively, 90.4% of American Assets Trust shares are held by institutional investors. 0.7% of Net Lease Office Properties shares are held by insiders. Comparatively, 37.9% of American Assets Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Net Lease Office Properties has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, American Assets Trust has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Net Lease Office Properties and American Assets Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Net Lease Office Properties	1	0	0	0	1.00
American Assets Trust	1	2	0	0	1.67

American Assets Trust has a consensus target price of $21.50, indicating a potential downside of 6.22%. Given American Assets Trust’s stronger consensus rating and higher possible upside, analysts plainly believe American Assets Trust is more favorable than Net Lease Office Properties.

Profitability

This table compares Net Lease Office Properties and American Assets Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Net Lease Office Properties	-59.82%	-16.92%	-12.66%
American Assets Trust	4.09%	1.66%	0.62%

Earnings and Valuation

This table compares Net Lease Office Properties and American Assets Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Net Lease Office Properties	$118.92 million	1.45	-$145.26 million	($3.06)	-3.82
American Assets Trust	$436.20 million	3.23	$71.37 million	$0.29	79.05

American Assets Trust has higher revenue and earnings than Net Lease Office Properties. Net Lease Office Properties is trading at a lower price-to-earnings ratio than American Assets Trust, indicating that it is currently the more affordable of the two stocks.

Summary

American Assets Trust beats Net Lease Office Properties on 13 of the 13 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 American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.