Essential Properties Realty Trust (NYSE:EPRT) vs. HG (OTCMKTS:STLY) Financial Analysis

HG (OTCMKTS:STLY) and Essential Properties Realty Trust (NYSE:EPRT) are both real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Profitability

This table compares HG and Essential Properties Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HG	14.15%	5.46%	4.29%
Essential Properties Realty Trust	43.51%	6.34%	3.81%

Volatility & Risk

HG has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500. Comparatively, Essential Properties Realty Trust has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Institutional and Insider Ownership

1.7% of HG shares are held by institutional investors. Comparatively, 97.0% of Essential Properties Realty Trust shares are held by institutional investors. 75.7% of HG shares are held by insiders. Comparatively, 0.8% of Essential Properties Realty Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for HG and Essential Properties Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HG	0	0	0	0	0.00
Essential Properties Realty Trust	0	0	11	1	3.08

Essential Properties Realty Trust has a consensus price target of $36.20, indicating a potential upside of 20.56%. Given Essential Properties Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Essential Properties Realty Trust is more favorable than HG.

Valuation and Earnings

This table compares HG and Essential Properties Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HG	$14.74 million	1.28	$1.53 million	$0.36	10.42
Essential Properties Realty Trust	$561.22 million	11.57	$253.01 million	$1.29	23.28

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

Summary

Essential Properties Realty Trust beats HG on 13 of the 15 factors compared between the two stocks.

About HG

HG Holdings, Inc. engages in the title insurance and real estate businesses in the United States. It operates through four segments: Title Insurance Services, Reinsurance, Management Services, and Real Estate. The company provides title insurance, closing and/or escrow, and similar or related services in connection with residential and commercial real estate transactions. It also owns and operates a portfolio of single-tenant properties leased for the occupancy by U.S. government tenant agencies and sub-agencies, such as the Federal Bureau of Investigation, the Department of Veterans affairs, the Drug Enforcement Administration, Immigration & Customs Enforcement, the Social Security Administration, and the Department of Transportation. In addition, the company provides excess-of-loss reinsurance coverage related to catastrophic weather risk in Texas; and management advisory services, such as formation, operational, and restructuring services. The company was formerly known as Stanley Furniture Company, Inc. and changed its name to HG Holdings, Inc. in March 2018. HG Holdings, Inc. was incorporated in 1984 and is headquartered in Charlotte, North Carolina.

About Essential Properties Realty Trust

Essential Properties Realty Trust, Inc., a real estate company, acquires, owns, and manages single-tenant properties in the United States. The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical and dental services, convenience stores, equipment rental, entertainment, early childhood education, grocery, and health and fitness on a long-term basis. As of December 31, 2021, it had a portfolio of 1, 451 properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2016 and is headquartered in Princeton, New Jersey.