Peakstone Realty Trust (NYSE:PKST) and Service Properties Trust (NASDAQ:SVC) Financial Survey

Peakstone Realty Trust (NYSE:PKST) and Service Properties Trust (NASDAQ:SVC) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Insider & Institutional Ownership

39.0% of Peakstone Realty Trust shares are owned by institutional investors. Comparatively, 77.6% of Service Properties Trust shares are owned by institutional investors. 0.8% of Peakstone Realty Trust shares are owned by company insiders. Comparatively, 1.4% of Service Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Peakstone Realty Trust and Service Properties Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peakstone Realty Trust	2	0	2	0	2.00
Service Properties Trust	2	2	0	0	1.50

Peakstone Realty Trust currently has a consensus target price of $17.50, suggesting a potential upside of 31.71%. Service Properties Trust has a consensus target price of $2.75, suggesting a potential upside of 17.02%. Given Peakstone Realty Trust’s stronger consensus rating and higher possible upside, research analysts plainly believe Peakstone Realty Trust is more favorable than Service Properties Trust.

Dividends

Peakstone Realty Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.0%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.7%. Peakstone Realty Trust pays out -4.5% of its earnings in the form of a dividend. Service Properties Trust pays out -2.4% 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. Peakstone Realty Trust has increased its dividend for 1 consecutive years. Peakstone Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Peakstone Realty Trust and Service Properties Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peakstone Realty Trust	$228.07 million	2.14	-$10.43 million	($8.89)	-1.49
Service Properties Trust	$1.90 billion	0.21	-$275.53 million	($1.67)	-1.41

Peakstone Realty Trust has higher earnings, but lower revenue than Service Properties Trust. Peakstone Realty Trust is trading at a lower price-to-earnings ratio than Service Properties Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Peakstone Realty Trust and Service Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peakstone Realty Trust	-145.77%	-31.54%	-13.18%
Service Properties Trust	-14.73%	-34.61%	-3.95%

Risk & Volatility

Peakstone Realty Trust has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, Service Properties Trust has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500.

Summary

Peakstone Realty Trust beats Service Properties Trust on 9 of the 17 factors compared between the two stocks.

About Peakstone Realty Trust

Peakstone Realty Trust (NYSE: PKST) is an internally managed, real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. These assets are generally leased to creditworthy tenants under long-term net lease agreements with contractual rent escalations. As of March 31, 2023, Peakstone's wholly-owned portfolio consists of 19 million square feet across 24 states in primarily high-growth, strategic coastal and sunbelt markets.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.