Critical Review: Global Net Lease (NYSE:GNL) & Essential Properties Realty Trust (NYSE:EPRT)

Global Net Lease (NYSE:GNL) and Essential Properties Realty Trust (NYSE:EPRT) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

63.5% of Global Net Lease shares are owned by institutional investors. Comparatively, 76.0% of Essential Properties Realty Trust shares are owned by institutional investors. 0.2% of Global Net Lease shares are owned by company insiders. Comparatively, 2.1% of Essential Properties Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Global Net Lease and Essential Properties Realty Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Net Lease 0 2 1 0 2.33
Essential Properties Realty Trust 0 3 8 0 2.73

Global Net Lease presently has a consensus target price of $24.00, suggesting a potential upside of 22.57%. Essential Properties Realty Trust has a consensus target price of $18.80, suggesting a potential downside of 11.86%. Given Global Net Lease’s higher possible upside, equities analysts clearly believe Global Net Lease is more favorable than Essential Properties Realty Trust.

Dividends

Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 10.9%. Essential Properties Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 3.9%. Global Net Lease pays out 99.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Global Net Lease and Essential Properties Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Global Net Lease 4.96% 1.00% 0.44%
Essential Properties Realty Trust 19.25% 2.40% 1.47%

Valuation and Earnings

This table compares Global Net Lease and Essential Properties Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Global Net Lease $282.21 million 5.82 $10.90 million $2.14 9.15
Essential Properties Realty Trust $96.22 million 16.64 $15.61 million N/A N/A

Essential Properties Realty Trust has lower revenue, but higher earnings than Global Net Lease.

Summary

Essential Properties Realty Trust beats Global Net Lease on 10 of the 13 factors compared between the two stocks.

Global Net Lease Company Profile

Global Net Lease, Inc. (NYSE: GNL) is a publicly traded real estate investment trust listed on the NYSE focused on acquiring a diversified global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States, Western and Northern Europe.

Essential Properties Realty Trust Company Profile

Essential Properties Realty Trust, Inc., a real estate company, acquires, owns, and manages single-tenant properties in the United States. The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical services, convenience stores, entertainment, early childhood education, and health and fitness on a long-term basis. As of December 31, 2018, it had a portfolio of 677 properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2016 and is based in Princeton, New Jersey.

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