Equity One (EQY) & Gladstone Commercial Corporation (GOOD) Critical Analysis

Equity One (NYSE: EQY) and Gladstone Commercial Corporation (NASDAQ:GOOD) are both financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Risk & Volatility

Equity One has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Gladstone Commercial Corporation has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Valuation and Earnings

This table compares Equity One and Gladstone Commercial Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Equity One N/A N/A N/A $0.49 62.96
Gladstone Commercial Corporation $88.78 million 6.78 $72.08 million ($0.12) -181.58

Gladstone Commercial Corporation has higher revenue and earnings than Equity One. Gladstone Commercial Corporation is trading at a lower price-to-earnings ratio than Equity One, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

64.0% of Equity One shares are owned by institutional investors. Comparatively, 49.1% of Gladstone Commercial Corporation shares are owned by institutional investors. 35.9% of Equity One shares are owned by company insiders. Comparatively, 2.2% of Gladstone Commercial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Equity One pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. Gladstone Commercial Corporation pays an annual dividend of $1.50 per share and has a dividend yield of 6.9%. Equity One pays out 179.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Commercial Corporation pays out -1,250.0% of its earnings in the form of a dividend. Gladstone Commercial Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Equity One and Gladstone Commercial Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity One 0 1 0 0 2.00
Gladstone Commercial Corporation 0 3 2 0 2.40

Gladstone Commercial Corporation has a consensus target price of $22.50, suggesting a potential upside of 3.26%. Given Gladstone Commercial Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Gladstone Commercial Corporation is more favorable than Equity One.

Profitability

This table compares Equity One and Gladstone Commercial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity One 18.64% 3.82% 2.05%
Gladstone Commercial Corporation 8.15% 3.08% 0.86%

Summary

Gladstone Commercial Corporation beats Equity One on 7 of the 13 factors compared between the two stocks.

Equity One Company Profile

Equity One, Inc. is a real estate investment trust (REIT). The Company owns, manages, acquires, develops and redevelops shopping centers and retail properties located in supply constrained suburban and urban communities. As of December 31, 2016, the Company’s portfolio consisted of 122 properties, including 101 retail properties and five non-retail properties totaling approximately 12.8 million square feet of gross leasable area (GLA), 10 development or redevelopment properties with approximately 2.3 million square feet of GLA, and six land parcels. Its retail occupancy excluding developments and redevelopments was 95.8% and included national, regional and local tenants as of December 31, 2016. In addition, the Company had joint venture interests in six retail properties and two office buildings totaling approximately 1.4 million square feet of GLA as of December 31, 2016.

Gladstone Commercial Corporation Company Profile

Gladstone Commercial Corporation is a real estate investment trust. The Company focuses on acquiring, owning and managing primarily office and industrial properties. The Company also makes long-term industrial and commercial mortgage loans. As of February 15, 2017, the Company owned 95 properties totaling 10.9 million square feet in 24 states. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Ohio, Pennsylvania, North Carolina, Georgia, South Carolina, Michigan, Minnesota, Colorado and New Jersey. The Company’s properties have tenants from various industries, such as telecommunications; healthcare; automobile; electronics; information technology; chemicals, plastics and rubber; containers, packaging and glass; personal and non-durable consumer products; machinery; banking; childcare; buildings and real estate; beverage, food and tobacco; printing and publishing; education; home and office furnishings, and oil and gas.

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