Contrasting JBG SMITH Properties (NYSE:JBGS) and Orion Office REIT (NYSE:ONL)

Orion Office REIT (NYSE:ONL) and JBG SMITH Properties (NYSE:JBGS) are both small-cap real estate companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Insider and Institutional Ownership

79.9% of Orion Office REIT shares are owned by institutional investors. Comparatively, 98.5% of JBG SMITH Properties shares are owned by institutional investors. 1.6% of Orion Office REIT shares are owned by company insiders. Comparatively, 11.9% of JBG SMITH Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Orion Office REIT and JBG SMITH Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion Office REIT	$147.65 million	0.94	-$139.31 million	($1.69)	-1.44
JBG SMITH Properties	$498.60 million	1.32	-$139.06 million	($2.61)	-4.32

JBG SMITH Properties has higher revenue and earnings than Orion Office REIT. JBG SMITH Properties is trading at a lower price-to-earnings ratio than Orion Office REIT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Orion Office REIT and JBG SMITH Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion Office REIT	1	0	1	0	2.00
JBG SMITH Properties	3	0	0	0	1.00

Orion Office REIT currently has a consensus price target of $3.50, suggesting a potential upside of 43.74%. JBG SMITH Properties has a consensus price target of $16.67, suggesting a potential upside of 47.89%. Given JBG SMITH Properties’ higher probable upside, analysts clearly believe JBG SMITH Properties is more favorable than Orion Office REIT.

Volatility and Risk

Orion Office REIT has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500. Comparatively, JBG SMITH Properties has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Dividends

Orion Office REIT pays an annual dividend of $0.08 per share and has a dividend yield of 3.3%. JBG SMITH Properties pays an annual dividend of $0.70 per share and has a dividend yield of 6.2%. Orion Office REIT pays out -4.7% of its earnings in the form of a dividend. JBG SMITH Properties pays out -26.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. JBG SMITH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Orion Office REIT and JBG SMITH Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orion Office REIT	-65.66%	-14.85%	-7.95%
JBG SMITH Properties	-29.89%	-13.31%	-3.49%

Summary

JBG SMITH Properties beats Orion Office REIT on 11 of the 16 factors compared between the two stocks.

About Orion Office REIT

Orion Office REIT specializes in the ownership, acquisition and management of a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S. The portfolio is leased primarily on a single-tenant net lease basis to creditworthy tenants. The company's team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.

About JBG SMITH Properties

JBG SMITH Properties is a real estate investment trust, which engages in owning, operating, investing in, and developing a portfolio of mixed-use properties. It operates through the following segments: Multifamily, Commercial, and Other. The Multifamily segment refers to the commercial buildings with public areas, retail spaces, and walkable streets. The Commercial segment rents to federal government tenants. The Other segment relates to development assets, corporate entities, land assets for which are the ground lessor and the elimination of inter-segment activity. The company was founded on October 27, 2016, and is headquartered in Bethesda, MD.