Head-To-Head Analysis: CTO Realty Growth (NYSE:CTO) and NETSTREIT (NYSE:NTST)

NETSTREIT (NYSE:NTST) and CTO Realty Growth (NYSE:CTO) are both real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Analyst Recommendations

This is a summary of current recommendations for NETSTREIT and CTO Realty Growth, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NETSTREIT	0	1	13	0	2.93
CTO Realty Growth	0	2	3	2	3.00

NETSTREIT presently has a consensus price target of $21.67, indicating a potential upside of 14.67%. CTO Realty Growth has a consensus price target of $24.00, indicating a potential upside of 17.59%. Given CTO Realty Growth’s stronger consensus rating and higher possible upside, analysts clearly believe CTO Realty Growth is more favorable than NETSTREIT.

Dividends

NETSTREIT pays an annual dividend of $0.90 per share and has a dividend yield of 4.8%. CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 7.4%. NETSTREIT pays out 409.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CTO Realty Growth pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NETSTREIT has raised its dividend for 1 consecutive years. CTO Realty Growth is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares NETSTREIT and CTO Realty Growth”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NETSTREIT	$195.01 million	12.18	$6.90 million	$0.22	85.91
CTO Realty Growth	$149.54 million	5.29	$10.09 million	$1.14	17.90

CTO Realty Growth has lower revenue, but higher earnings than NETSTREIT. CTO Realty Growth is trading at a lower price-to-earnings ratio than NETSTREIT, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

NETSTREIT has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, CTO Realty Growth has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Insider and Institutional Ownership

67.2% of CTO Realty Growth shares are held by institutional investors. 0.7% of NETSTREIT shares are held by insiders. Comparatively, 4.5% of CTO Realty Growth shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares NETSTREIT and CTO Realty Growth’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NETSTREIT	9.18%	1.33%	0.74%
CTO Realty Growth	26.12%	7.15%	3.26%

Summary

CTO Realty Growth beats NETSTREIT on 12 of the 18 factors compared between the two stocks.

About NETSTREIT

NETSTREIT is a Dallas-based real estate investment trust (REIT) that owns and manages single-tenant retail properties leased to businesses across the United States. Its portfolio focuses on retailers that provide everyday goods and services, including grocery, convenience, pharmacy and home-improvement businesses. The company primarily uses net leases, under which tenants generally pay some or all property expenses in addition to rent. NETSTREIT was formed in 2019 and became a publicly traded company in 2020.

About CTO Realty Growth

CTO Realty Growth, Inc. is a real estate investment trust that acquires, owns and manages income-producing commercial properties. Its portfolio is focused primarily on open-air retail and mixed-use properties, including shopping centers and other retail-oriented real estate. The company invests in markets across the United States, with an emphasis on high-growth Sun Belt locations. It also holds an interest in Alpine Income Property Trust, a separately traded real estate investment trust focused on commercial net-lease properties.