Monmouth Real Estate Investment Corporation (NYSE: MNR) and Government Properties Income Trust (NYSE:GOV) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.
Dividends
Monmouth Real Estate Investment Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 4.0%. Government Properties Income Trust pays an annual dividend of $1.72 per share and has a dividend yield of 9.4%. Monmouth Real Estate Investment Corporation pays out 213.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Government Properties Income Trust pays out -76.1% of its earnings in the form of a dividend. Monmouth Real Estate Investment Corporation has raised its dividend for 2 consecutive years. Government Properties Income Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
58.4% of Monmouth Real Estate Investment Corporation shares are owned by institutional investors. 5.3% of Monmouth Real Estate Investment Corporation shares are owned by 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 and Valuation
This table compares Monmouth Real Estate Investment Corporation and Government Properties Income Trust’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Monmouth Real Estate Investment Corporation | $108.67 million | 10.83 | $82.64 million | $0.30 | 52.77 |
| Government Properties Income Trust | $269.69 million | N/A | $143.68 million | ($2.26) | -8.12 |
Government Properties Income Trust has higher revenue and earnings than Monmouth Real Estate Investment Corporation. Government Properties Income Trust is trading at a lower price-to-earnings ratio than Monmouth Real Estate Investment Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Monmouth Real Estate Investment Corporation has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Government Properties Income Trust has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.
Profitability
This table compares Monmouth Real Estate Investment Corporation and Government Properties Income Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Monmouth Real Estate Investment Corporation | 32.02% | 7.91% | 2.69% |
| Government Properties Income Trust | 4.64% | 5.16% | 0.55% |
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Monmouth Real Estate Investment Corporation and Government Properties Income Trust, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Monmouth Real Estate Investment Corporation | 0 | 1 | 3 | 0 | 2.75 |
| Government Properties Income Trust | 3 | 0 | 1 | 0 | 1.50 |
Monmouth Real Estate Investment Corporation presently has a consensus price target of $16.38, suggesting a potential upside of 3.44%. Government Properties Income Trust has a consensus price target of $18.13, suggesting a potential downside of 1.17%. Given Monmouth Real Estate Investment Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe Monmouth Real Estate Investment Corporation is more favorable than Government Properties Income Trust.
Summary
Monmouth Real Estate Investment Corporation beats Government Properties Income Trust on 10 of the 16 factors compared between the two stocks.
About Monmouth Real Estate Investment Corporation
Monmouth Real Estate Investment Corporation is a real estate investment trust (REIT). The Company’s primary business is the ownership of real estate. Its investment focus is to own single tenant, industrial buildings and leased to investment-grade tenants or their subsidiaries on long-term net leases. In addition, the Company owns a portfolio of REIT investment securities. Its assets are situated near airports, transportation hubs and manufacturing plants. The Company’s featured properties include ULTA Cosmetics, Milwaukee Tool, Beam Suntory, FedEx Supply Chain Services, Coca-Cola, Best Buy, International Paper, Home Depot, FedEx Ground, Actavis, Anheuser-Busch, United Technologies, Kellogg’s, Siemens, National Oilwell and Cardinal Health. The Company’s property portfolio consists of approximately 105 properties located in over 30 states, containing a total of approximately 17.9 million rentable square feet.
About Government Properties Income Trust
Government Properties Income Trust is a real estate investment trust (REIT). The Company operates through two segments: ownership of properties that are primarily leased to government tenants and its equity method investment in Select Income REIT (SIR). The Company’s properties are located in areas, including Alabama, Arizona, California, Colorado, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey and New Mexico. As of December 31, 2016, the Company owned 73 properties (95 buildings). As of December 31, 2016, the Company’s properties were located in 31 states and the District of Columbia, and contained approximately 11.4 million rentable square feet.
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