Comparing Select Income REIT (SIR) and its Rivals

Select Income REIT (NASDAQ: SIR) is one of 85 public companies in the “Commercial REITs” industry, but how does it contrast to its rivals? We will compare Select Income REIT to similar businesses based off the strength of its analyst recommendations, earnings, valuation, dividends, profitability, institutional ownership and risk.

Institutional and Insider Ownership

48.4% of Select Income REIT shares are owned by institutional investors. Comparatively, 69.3% of shares of all “Commercial REITs” companies are owned by institutional investors. 2.0% of Select Income REIT shares are owned by company insiders. Comparatively, 8.5% of shares of all “Commercial REITs” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Select Income REIT and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Select Income REIT 18.65% 4.18% 1.85%
Select Income REIT Competitors 45.77% 5.92% 3.28%

Volatility and Risk

Select Income REIT has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Select Income REIT’s rivals have a beta of 0.81, indicating that their average share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Select Income REIT and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Select Income REIT 0 0 1 0 3.00
Select Income REIT Competitors 744 2714 2243 31 2.27

Select Income REIT presently has a consensus target price of $34.00, indicating a potential upside of 46.49%. All “Commercial REITs” companies have a potential upside of 3.41%. Given Select Income REIT’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Select Income REIT is more favorable than its rivals.

Dividends

Select Income REIT pays an annual dividend of $2.04 per share and has a dividend yield of 8.8%. Select Income REIT pays out 210.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 3.9% and pay out 204.8% of their earnings in the form of a dividend.

Valuation and Earnings

This table compares Select Income REIT and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Select Income REIT $462.04 million $323.87 million 23.93
Select Income REIT Competitors $460.14 million $291.61 million 32.13

Select Income REIT has higher revenue and earnings than its rivals. Select Income REIT is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently the more affordable than other companies in its industry.

Summary

Select Income REIT rivals beat Select Income REIT on 9 of the 15 factors compared.

About Select Income REIT

Select Income REIT is a real estate investment trust. The Company is engaged in the ownership of properties that include buildings and leased industrial lands that are primarily net leased to single tenants. As of December 31, 2016, the Company owned 121 properties (362 buildings, leasable land parcels and easements) with approximately 44.8 million rentable square feet. As of December 31, 2016, the Company’s properties consisted of 110 office and industrial properties (133 buildings) with approximately 27.0 million square feet located in 34 states throughout the mainland United States (Mainland Properties), and 11 properties (229 buildings, leasable land parcels and easements) located on the island of Oahu, Hawaii, with approximately 17.8 million rentable square feet that are primarily leased to industrial and commercial tenants (Hawaii Properties). As of December 31, 2016, the Company’s properties were leased to 312 different tenants.

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