Critical Contrast: NNN REIT (NYSE:NNN) vs. Peakstone Realty Trust (NYSE:PKST)

NNN REIT (NYSE:NNN) and Peakstone Realty Trust (NYSE:PKST) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

90.0% of NNN REIT shares are owned by institutional investors. Comparatively, 39.0% of Peakstone Realty Trust shares are owned by institutional investors. 0.9% of NNN REIT shares are owned by company insiders. Comparatively, 0.8% of Peakstone Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares NNN REIT and Peakstone Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NNN REIT	45.09%	9.23%	4.49%
Peakstone Realty Trust	-28.71%	-5.70%	-2.48%

Valuation & Earnings

This table compares NNN REIT and Peakstone Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NNN REIT	$869.27 million	9.17	$396.83 million	$2.14	19.81
Peakstone Realty Trust	$228.07 million	2.08	-$10.43 million	($1.77)	-7.30

NNN REIT has higher revenue and earnings than Peakstone Realty Trust. Peakstone Realty Trust is trading at a lower price-to-earnings ratio than NNN REIT, indicating that it is currently the more affordable of the two stocks.

Dividends

NNN REIT pays an annual dividend of $2.32 per share and has a dividend yield of 5.5%. Peakstone Realty Trust pays an annual dividend of $0.90 per share and has a dividend yield of 7.0%. NNN REIT pays out 108.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Peakstone Realty Trust pays out -50.8% of its earnings in the form of a dividend. NNN REIT has increased its dividend for 35 consecutive years and Peakstone Realty Trust has increased its dividend for 1 consecutive years. Peakstone Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

NNN REIT has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Peakstone Realty Trust has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for NNN REIT and Peakstone Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NNN REIT	1	9	3	0	2.15
Peakstone Realty Trust	0	1	1	0	2.50

NNN REIT presently has a consensus target price of $44.46, indicating a potential upside of 4.89%. Peakstone Realty Trust has a consensus target price of $15.50, indicating a potential upside of 19.97%. Given Peakstone Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Peakstone Realty Trust is more favorable than NNN REIT.

Summary

NNN REIT beats Peakstone Realty Trust on 12 of the 17 factors compared between the two stocks.

About NNN REIT

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years.

About Peakstone Realty Trust

Peakstone Realty Trust (NYSE: PKST) is an internally managed, real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. These assets are generally leased to creditworthy tenants under long-term net lease agreements with contractual rent escalations. As of March 31, 2023, Peakstone's wholly-owned portfolio consists of 19 million square feet across 24 states in primarily high-growth, strategic coastal and sunbelt markets.