Contrasting Lexington Realty Trust (LXP) & Government Properties Income Trust (GOV)

Lexington Realty Trust (NYSE: LXP) and Government Properties Income Trust (NASDAQ:GOV) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Risk & Volatility

Lexington Realty Trust has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Government Properties Income Trust has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Dividends

Lexington Realty Trust pays an annual dividend of $0.71 per share and has a dividend yield of 7.9%. Government Properties Income Trust pays an annual dividend of $1.72 per share and has a dividend yield of 10.0%. Lexington Realty Trust pays out 244.8% 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 312.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lexington Realty Trust has increased its dividend for 7 consecutive years.

Profitability

This table compares Lexington Realty Trust and Government Properties Income Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lexington Realty Trust 17.96% 5.29% 2.00%
Government Properties Income Trust 15.30% 4.27% 1.66%

Analyst Ratings

This is a summary of recent ratings and target prices for Lexington Realty Trust and Government Properties Income Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lexington Realty Trust 0 6 0 0 2.00
Government Properties Income Trust 2 1 2 0 2.00

Lexington Realty Trust currently has a consensus target price of $10.69, indicating a potential upside of 19.55%. Government Properties Income Trust has a consensus target price of $18.75, indicating a potential upside of 9.33%. Given Lexington Realty Trust’s higher possible upside, research analysts clearly believe Lexington Realty Trust is more favorable than Government Properties Income Trust.

Earnings and Valuation

This table compares Lexington Realty Trust and Government Properties Income Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lexington Realty Trust $429.50 million 5.01 $95.62 million $0.29 30.83
Government Properties Income Trust $258.18 million 6.59 $57.84 million $0.55 31.18

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

Insider & Institutional Ownership

73.9% of Lexington Realty Trust shares are held by institutional investors. Comparatively, 58.3% of Government Properties Income Trust shares are held by institutional investors. 3.1% of Lexington Realty Trust shares are held by insiders. Comparatively, 2.7% of Government Properties Income Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Lexington Realty Trust beats Government Properties Income Trust on 10 of the 16 factors compared between the two stocks.

About Lexington Realty Trust

Lexington Realty Trust is a real estate investment trust (REIT). The Company owns a portfolio of equity and debt investments in single-tenant commercial properties. As of December 31, 2016, the Company had equity ownership interests in approximately 195 consolidated real estate properties, located in 40 states and containing an aggregate of approximately 43.3 million square feet of space, approximately 96.0% of which was leased. The Company conducts its operations either directly or indirectly through property owner subsidiaries and lender subsidiaries, which are single purpose entities; an operating partnership, Lepercq Corporate Income Fund L.P. (LCIF), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests; Lexington Realty Advisors, Inc. (LRA), a subsidiary of the Company, and investments in joint ventures.

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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