Critical Review: Wheeler Real Estate Investment Trust (WHLR) versus PS Business Parks (PSB)

Wheeler Real Estate Investment Trust (NASDAQ:WHLR) and PS Business Parks (NYSE:PSB) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Dividends

PS Business Parks pays an annual dividend of $4.20 per share and has a dividend yield of 2.6%. Wheeler Real Estate Investment Trust does not pay a dividend. PS Business Parks pays out 64.9% of its earnings in the form of a dividend. Wheeler Real Estate Investment Trust has raised its dividend for 2 consecutive years and PS Business Parks has raised its dividend for 5 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Wheeler Real Estate Investment Trust and PS Business Parks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wheeler Real Estate Investment Trust 0 0 0 0 N/A
PS Business Parks 1 2 0 0 1.67

PS Business Parks has a consensus price target of $128.67, suggesting a potential downside of 21.39%. Given PS Business Parks’ higher possible upside, analysts plainly believe PS Business Parks is more favorable than Wheeler Real Estate Investment Trust.

Profitability

This table compares Wheeler Real Estate Investment Trust and PS Business Parks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wheeler Real Estate Investment Trust -21.46% -103.06% -2.12%
PS Business Parks 46.31% 18.97% 9.36%

Insider and Institutional Ownership

20.1% of Wheeler Real Estate Investment Trust shares are owned by institutional investors. Comparatively, 72.5% of PS Business Parks shares are owned by institutional investors. 5.3% of Wheeler Real Estate Investment Trust shares are owned by company insiders. Comparatively, 1.5% of PS Business Parks shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Wheeler Real Estate Investment Trust has a beta of 3.66, indicating that its share price is 266% more volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Valuation and Earnings

This table compares Wheeler Real Estate Investment Trust and PS Business Parks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wheeler Real Estate Investment Trust $65.71 million 0.29 -$16.50 million N/A N/A
PS Business Parks $413.52 million 10.85 $226.70 million $6.47 25.30

PS Business Parks has higher revenue and earnings than Wheeler Real Estate Investment Trust.

Summary

PS Business Parks beats Wheeler Real Estate Investment Trust on 11 of the 14 factors compared between the two stocks.

Wheeler Real Estate Investment Trust Company Profile

Headquartered in Virginia Beach, VA, Wheeler Real Estate Investment Trust, Inc. is a fully-integrated, self-managed commercial real estate investment company focused on owning and operating income-producing retail properties with a primary focus on grocery-anchored centers. Wheeler's portfolio contains well-located, potentially dominant retail properties in secondary and tertiary markets that generate attractive, risk-adjusted returns, with a particular emphasis on grocery-anchored retail centers.

PS Business Parks Company Profile

PS Business Parks, Inc., a member of the S&P SmallCap 600, is a REIT that acquires, develops, owns and operates commercial properties, primarily multi-tenant industrial, flex and office space. As of December 31, 2018, the Company wholly owned 28.2 million rentable square feet with approximately 5,050 commercial customers in six states and held a 95.0% interest in a 395-unit apartment complex.

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