Comparing NRF Holdco (NRF) & Global Net Lease (GNL)

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

Analyst Recommendations

This is a summary of current recommendations for Global Net Lease and NRF Holdco, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Net Lease 0 2 0 0 2.00
NRF Holdco 0 0 0 0 N/A

Global Net Lease currently has a consensus price target of $25.23, indicating a potential upside of 17.38%. Given Global Net Lease’s higher possible upside, analysts plainly believe Global Net Lease is more favorable than NRF Holdco.

Risk and Volatility

Global Net Lease has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, NRF Holdco has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500.

Dividends

Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 9.9%. NRF Holdco pays an annual dividend of $1.60 per share and has a dividend yield of 9.9%. 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. NRF Holdco pays out -88.9% of its earnings in the form of a dividend. NRF Holdco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
Global Net Lease 12.65% 2.29% 1.06%
NRF Holdco -16.61% -17.86% -2.44%

Institutional and Insider Ownership

43.0% of Global Net Lease shares are held by institutional investors. Comparatively, 69.7% of NRF Holdco shares are held by institutional investors. 0.2% of Global Net Lease shares are held by company insiders. Comparatively, 2.4% of NRF Holdco shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Global Net Lease and NRF Holdco’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Global Net Lease $214.17 million 6.75 $47.14 million $0.49 43.86
NRF Holdco N/A N/A N/A ($1.80) -8.96

Global Net Lease has higher revenue and earnings than NRF Holdco. NRF Holdco 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.

Summary

Global Net Lease beats NRF Holdco on 6 of the 11 factors compared between the two stocks.

Global Net Lease Company Profile

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.

NRF Holdco Company Profile

NRF Holdco LLC. is a commercial real estate company. The Company invests in multiple asset classes across commercial real estate (CRE). Its portfolio consists of healthcare, hotel, manufactured housing communities, net lease and multifamily properties. The Company also invests in other opportunistic real estate investments, such as indirect interests in real estate through its investments in private equity funds (PE Investments). The Company also acquires and operates hotel and certain healthcare properties. The Company’s segments include Real Estate, Commercial Real Estate Debt (CRE debt), Commercial Real Estate Securities, N-Star CDOs and Corporate. Its real estate equity investments that operate under the REIT Investment Diversification and Empowerment Act (RIDEA) structure generate resident and hotel guest related income from short-term residential agreements. The Company is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc.

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