Contrasting Lexington Realty Trust (LXP) & Public Storage (PSA)

Lexington Realty Trust (NYSE: LXP) and Public Storage (NYSE:PSA) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Dividends

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Lexington Realty Trust pays an annual dividend of $0.71 per share and has a dividend yield of 9.2%. Public Storage pays an annual dividend of $8.00 per share and has a dividend yield of 4.1%. Lexington Realty Trust pays out 215.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Public Storage pays out 118.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lexington Realty Trust has raised its dividend for 8 consecutive years and Public Storage has raised its dividend for 7 consecutive years. Lexington Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Lexington Realty Trust and Public Storage’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lexington Realty Trust $391.64 million 4.75 $85.58 million $0.33 23.39
Public Storage $2.67 billion 12.60 $1.44 billion $6.74 28.64

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

Insider and Institutional Ownership

75.0% of Lexington Realty Trust shares are held by institutional investors. Comparatively, 81.7% of Public Storage shares are held by institutional investors. 3.1% of Lexington Realty Trust shares are held by insiders. Comparatively, 14.0% of Public Storage shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Lexington Realty Trust has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Public Storage has a beta of 0.31, indicating that its stock price is 69% less volatile than the S&P 500.

Profitability

This table compares Lexington Realty Trust and Public Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lexington Realty Trust 21.84% 6.64% 2.45%
Public Storage 51.16% 27.48% 13.02%

Analyst Ratings

This is a breakdown of recent ratings for Lexington Realty Trust and Public Storage, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lexington Realty Trust 1 7 0 0 1.88
Public Storage 5 9 1 0 1.73

Lexington Realty Trust currently has a consensus target price of $10.13, indicating a potential upside of 31.15%. Public Storage has a consensus target price of $204.47, indicating a potential upside of 5.91%. Given Lexington Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Lexington Realty Trust is more favorable than Public Storage.

Summary

Public Storage beats Lexington Realty Trust on 12 of the 17 factors compared between the two stocks.

About Lexington Realty Trust

Lexington Realty Trust is a real estate investment trust (REIT). The Company owns a portfolio of equity and debt investments in single-tenant commercial properties. As of December 31, 2016, the Company had equity ownership interests in approximately 195 consolidated real estate properties, located in 40 states and containing an aggregate of approximately 43.3 million square feet of space, approximately 96.0% of which was leased. The Company conducts its operations either directly or indirectly through property owner subsidiaries and lender subsidiaries, which are single purpose entities; an operating partnership, Lepercq Corporate Income Fund L.P. (LCIF), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests; Lexington Realty Advisors, Inc. (LRA), a subsidiary of the Company, and investments in joint ventures.

About Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns and operates self-storage facilities. The Company's headquarters are located in Glendale, California. At December 31, 2017, we had interests in 2,386 self-storage facilities located in 38 states with approximately 159 million net rentable square feet in the United States and 222 storage facilities located in seven Western European nations with approximately 12 million net rentable square feet operated under the ?Shurgard? brand. We also own a 42% common equity interest in PS Business Parks, Inc. (NYSE:PSB) which owned and operated approximately 28 million rentable square feet of commercial space at December 31, 2017. Additional information about Public Storage is available on our website, PublicStorage.com.

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