Critical Review: LXP Industrial Trust (NYSE:LXP) versus City Office REIT (NYSE:CIO)

LXP Industrial Trust (NYSE:LXP) and City Office REIT (NYSE:CIO) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Volatility and Risk

LXP Industrial Trust has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, City Office REIT has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500.

Dividends

LXP Industrial Trust pays an annual dividend of $0.52 per share and has a dividend yield of 6.1%. City Office REIT pays an annual dividend of $0.40 per share and has a dividend yield of 8.7%. LXP Industrial Trust pays out 650.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. City Office REIT pays out -160.0% of its earnings in the form of a dividend. LXP Industrial Trust has increased its dividend for 4 consecutive years. City Office REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares LXP Industrial Trust and City Office REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LXP Industrial Trust	8.92%	1.37%	0.76%
City Office REIT	-1.50%	-0.40%	-0.17%

Valuation & Earnings

This table compares LXP Industrial Trust and City Office REIT’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LXP Industrial Trust	$340.50 million	7.33	$30.38 million	$0.08	106.08
City Office REIT	$179.10 million	1.03	-$2.68 million	($0.25)	-18.32

LXP Industrial Trust has higher revenue and earnings than City Office REIT. City Office REIT is trading at a lower price-to-earnings ratio than LXP Industrial Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for LXP Industrial Trust and City Office REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LXP Industrial Trust	0	0	1	0	3.00
City Office REIT	0	1	0	0	2.00

LXP Industrial Trust presently has a consensus price target of $11.00, suggesting a potential upside of 29.64%. City Office REIT has a consensus price target of $7.00, suggesting a potential upside of 52.84%. Given City Office REIT’s higher probable upside, analysts clearly believe City Office REIT is more favorable than LXP Industrial Trust.

Insider & Institutional Ownership

93.5% of LXP Industrial Trust shares are owned by institutional investors. Comparatively, 67.5% of City Office REIT shares are owned by institutional investors. 2.2% of LXP Industrial Trust shares are owned by insiders. Comparatively, 3.9% of City Office REIT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

LXP Industrial Trust beats City Office REIT on 12 of the 17 factors compared between the two stocks.

About LXP Industrial Trust

LXP Industrial Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) focused on single-tenant industrial real estate investments across the United States. LXP seeks to expand its industrial portfolio through acquisitions, build-to-suit transactions, sale-leaseback transactions, development projects and other transactions.

About City Office REIT

City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located predominantly in Sun Belt markets. City Office currently owns or has a controlling interest in 5.7 million square feet of office properties. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.