Head to Head Comparison: Store Capital (STOR) vs. Global Net Lease (GNL)

Store Capital (NYSE: STOR) and Global Net Lease (NYSE:GNL) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Store Capital and Global Net Lease, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Store Capital 0 4 9 0 2.69
Global Net Lease 0 2 0 0 2.00

Store Capital currently has a consensus target price of $27.00, indicating a potential upside of 15.48%. Global Net Lease has a consensus target price of $26.00, indicating a potential upside of 58.44%. Given Global Net Lease’s higher probable upside, analysts clearly believe Global Net Lease is more favorable than Store Capital.

Profitability

This table compares Store Capital and Global Net Lease’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Store Capital 35.67% 5.35% 2.82%
Global Net Lease 12.65% 2.29% 1.06%

Institutional and Insider Ownership

94.8% of Store Capital shares are owned by institutional investors. Comparatively, 44.6% of Global Net Lease shares are owned by institutional investors. 0.9% of Store Capital shares are owned by company insiders. Comparatively, 0.2% of Global Net Lease shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Store Capital and Global Net Lease’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Store Capital $376.34 million 11.80 $123.32 million $0.89 26.27
Global Net Lease $214.17 million 5.16 $47.14 million $0.49 33.49

Store Capital has higher revenue and earnings than Global Net Lease. Store Capital is trading at a lower price-to-earnings ratio than Global Net Lease, indicating that it is currently the more affordable of the two stocks.

Dividends

Store Capital pays an annual dividend of $1.24 per share and has a dividend yield of 5.3%. Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 13.0%. Store Capital pays out 139.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Net Lease pays out 434.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Store Capital has raised its dividend for 2 consecutive years.

Volatility and Risk

Store Capital has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500. Comparatively, Global Net Lease has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Summary

Store Capital beats Global Net Lease on 13 of the 17 factors compared between the two stocks.

About Store Capital

STORE Capital Corporation is an internally managed net-lease real estate investment trust. The Company is engaged in the acquisition, investment and management of single tenant operational real estate (STORE) properties. As of December 31, 2016, the Company owned a portfolio that consisted of investments in 1,660 property locations operated by 360 customers across 48 states. Its customers operate across a range of industries within the service, retail and manufacturing sectors of the United States economy, with restaurants, early childhood education centers, movie theaters, health clubs and furniture stores. The Company’s portfolio includes investments in approximately 1,330 property locations operated by over 300 customers across approximately 50 states. The Company provides real estate financing solutions principally to businesses that own STORE properties and operate within the broad-based service, retail and industrial sectors of the United States economy.

About Global Net Lease

Global Net Lease, Inc. is a real estate investment trust. The Company’s business consists of owning, managing, operating, leasing, acquiring, investing in and disposing of real estate assets. It owns and invests in commercial properties principally in the United States, the United Kingdom and continental Europe that are then leased to companies. It was formed to primarily acquire a portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant net-leased commercial properties. As of December 31, 2016, it owned 310 properties consisting of 22 million rentable square feet. As of December 31, 2016, its owned 310 properties, including 241 properties located in the United States and Puerto Rico, 43 properties located in the United Kingdom and 26 properties located across continental Europe. It may also originate or acquire first mortgage loans secured by real estate. Its business is conducted through Global Net Lease Operating Partnership, L.P.

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