Comparing Net Lease Office Properties (NYSE:NLOP) & Terreno Realty (NYSE:TRNO)

Terreno Realty (NYSE:TRNO) and Net Lease Office Properties (NYSE:NLOP) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

58.3% of Net Lease Office Properties shares are owned by institutional investors. 1.9% of Terreno Realty shares are owned by company insiders. Comparatively, 0.7% of Net Lease Office Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Terreno Realty and Net Lease Office Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terreno Realty	1	2	8	1	2.75
Net Lease Office Properties	1	0	0	0	1.00

Terreno Realty currently has a consensus target price of $69.36, suggesting a potential upside of 5.43%. Given Terreno Realty’s stronger consensus rating and higher possible upside, analysts plainly believe Terreno Realty is more favorable than Net Lease Office Properties.

Risk & Volatility

Terreno Realty has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Net Lease Office Properties has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Profitability

This table compares Terreno Realty and Net Lease Office Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Terreno Realty	84.51%	10.08%	7.82%
Net Lease Office Properties	-122.16%	-31.89%	-23.92%

Earnings and Valuation

This table compares Terreno Realty and Net Lease Office Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terreno Realty	$476.38 million	14.67	$402.99 million	$3.90	16.87
Net Lease Office Properties	$118.92 million	1.59	-$145.26 million	($9.80)	-1.30

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

Summary

Terreno Realty beats Net Lease Office Properties on 14 of the 15 factors compared between the two stocks.

About Terreno Realty

Terreno Realty Corporation (Terreno, and together with its subsidiaries, the Company) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. All square feet, acres, occupancy and number of properties disclosed in these notes to the consolidated financial statements are unaudited. As of December 31, 2023, the Company owned 259 buildings aggregating approximately 16.0 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development. The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (REIT) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year ended December 31, 2010.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.