Financial Survey: Equity LifeStyle Properties (NYSE:ELS) versus Net Lease Office Properties (NYSE:NLOP)

Equity LifeStyle Properties (NYSE:ELS) and Net Lease Office Properties (NYSE:NLOP) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Equity LifeStyle Properties and Net Lease Office Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity LifeStyle Properties	0	6	1	0	2.14
Net Lease Office Properties	0	0	1	0	3.00

Equity LifeStyle Properties presently has a consensus target price of $70.15, suggesting a potential upside of 11.88%. Net Lease Office Properties has a consensus target price of $60.00, suggesting a potential upside of 153.27%. Given Net Lease Office Properties’ stronger consensus rating and higher probable upside, analysts plainly believe Net Lease Office Properties is more favorable than Equity LifeStyle Properties.

Valuation and Earnings

This table compares Equity LifeStyle Properties and Net Lease Office Properties’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity LifeStyle Properties	$1.49 billion	7.85	$314.21 million	$1.68	37.32
Net Lease Office Properties	$174.97 million	2.00	-$131.75 million	N/A	N/A

Equity LifeStyle Properties has higher revenue and earnings than Net Lease Office Properties.

Profitability

This table compares Equity LifeStyle Properties and Net Lease Office Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity LifeStyle Properties	21.09%	20.90%	5.62%
Net Lease Office Properties	N/A	N/A	N/A

Insider and Institutional Ownership

97.2% of Equity LifeStyle Properties shares are held by institutional investors. Comparatively, 58.3% of Net Lease Office Properties shares are held by institutional investors. 1.4% of Equity LifeStyle Properties 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.

Dividends

Equity LifeStyle Properties pays an annual dividend of $1.91 per share and has a dividend yield of 3.0%. Net Lease Office Properties pays an annual dividend of $0.34 per share and has a dividend yield of 1.4%. Equity LifeStyle Properties pays out 113.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity LifeStyle Properties has raised its dividend for 20 consecutive years. Equity LifeStyle Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Equity LifeStyle Properties beats Net Lease Office Properties on 10 of the 13 factors compared between the two stocks.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (REIT) with headquarters in Chicago. As of January 29, 2024, we own or have an interest in 451 properties in 35 states and British Columbia consisting of 172,465 sites.

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.