Service Properties Trust (NASDAQ:SVC – Get Free Report) and Medalist Diversified REIT (NASDAQ:MDRR – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.
Volatility & Risk
Service Properties Trust has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Medalist Diversified REIT has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.
Earnings & Valuation
This table compares Service Properties Trust and Medalist Diversified REIT”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Service Properties Trust | $1.81 billion | 0.13 | -$202.32 million | ($1.21) | -1.18 |
| Medalist Diversified REIT | $10.40 million | 1.61 | -$2.39 million | ($1.84) | -6.35 |
Medalist Diversified REIT has lower revenue, but higher earnings than Service Properties Trust. Medalist Diversified REIT is trading at a lower price-to-earnings ratio than Service Properties Trust, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Service Properties Trust and Medalist Diversified REIT’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Service Properties Trust | -11.15% | -29.70% | -2.96% |
| Medalist Diversified REIT | -22.37% | -9.28% | -2.86% |
Institutional & Insider Ownership
77.6% of Service Properties Trust shares are owned by institutional investors. Comparatively, 17.4% of Medalist Diversified REIT shares are owned by institutional investors. 1.6% of Service Properties Trust shares are owned by insiders. Comparatively, 43.8% of Medalist Diversified REIT shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Dividends
Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 2.8%. Medalist Diversified REIT pays an annual dividend of $0.27 per share and has a dividend yield of 2.3%. Service Properties Trust pays out -3.3% of its earnings in the form of a dividend. Medalist Diversified REIT pays out -14.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Medalist Diversified REIT has raised its dividend for 2 consecutive years.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Service Properties Trust and Medalist Diversified REIT, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Service Properties Trust | 1 | 2 | 1 | 0 | 2.00 |
| Medalist Diversified REIT | 1 | 0 | 0 | 0 | 1.00 |
Service Properties Trust presently has a consensus target price of $2.00, indicating a potential upside of 40.45%. Given Service Properties Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe Service Properties Trust is more favorable than Medalist Diversified REIT.
Summary
Service Properties Trust beats Medalist Diversified REIT on 10 of the 17 factors compared between the two stocks.
About Service Properties Trust
Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.
About Medalist Diversified REIT
Medalist Diversified REIT Inc. is a Virginia-based real estate investment trust that specializes in acquiring, owning and managing commercial real estate in the Southeast region of the U.S. The Company's strategy is to focus on commercial real estate which is expected to provide an attractive balance of risk and returns. Medalist utilizes a rigorous, consistent and replicable process for sourcing and conducting due diligence of acquisitions.
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