Critical Contrast: Franklin Street Properties (NYSE:FSP) vs. Global Medical REIT (NYSE:GMRE)

Franklin Street Properties (NYSE:FSPGet Rating) and Global Medical REIT (NYSE:GMREGet Rating) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

This table compares Franklin Street Properties and Global Medical REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franklin Street Properties 44.29% 12.12% 5.92%
Global Medical REIT 15.20% 3.20% 1.46%

Dividends

Franklin Street Properties pays an annual dividend of $0.36 per share and has a dividend yield of 6.5%. Global Medical REIT pays an annual dividend of $0.84 per share and has a dividend yield of 5.3%. Franklin Street Properties pays out 40.9% of its earnings in the form of a dividend. Global Medical REIT pays out 442.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Medical REIT has raised its dividend for 2 consecutive years. Franklin Street Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations and price targets for Franklin Street Properties and Global Medical REIT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franklin Street Properties 0 0 0 0 N/A
Global Medical REIT 0 0 3 0 3.00

Global Medical REIT has a consensus price target of $17.67, indicating a potential upside of 11.25%. Given Global Medical REIT’s higher possible upside, analysts clearly believe Global Medical REIT is more favorable than Franklin Street Properties.

Institutional and Insider Ownership

82.4% of Franklin Street Properties shares are held by institutional investors. Comparatively, 70.9% of Global Medical REIT shares are held by institutional investors. 4.7% of Franklin Street Properties shares are held by company insiders. Comparatively, 7.6% of Global Medical REIT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Franklin Street Properties has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Global Medical REIT has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Valuation & Earnings

This table compares Franklin Street Properties and Global Medical REIT’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Franklin Street Properties $209.36 million 2.73 $92.72 million $0.88 6.30
Global Medical REIT $115.94 million 8.96 $17.62 million $0.19 83.58

Franklin Street Properties has higher revenue and earnings than Global Medical REIT. Franklin Street Properties is trading at a lower price-to-earnings ratio than Global Medical REIT, indicating that it is currently the more affordable of the two stocks.

Summary

Franklin Street Properties beats Global Medical REIT on 9 of the 16 factors compared between the two stocks.

Franklin Street Properties Company Profile (Get Rating)

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.

Global Medical REIT Company Profile (Get Rating)

Global Medical REIT Inc. is net-lease medical office REIT that acquires purpose-built specialized healthcare facilities and leases those facilities to strong healthcare systems and physician groups with leading market share.

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