Critical Review: TPG RE Finance Trust (NYSE:TRTX) vs. Life Storage (NYSE:LSI)

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TPG RE Finance Trust (NYSE:TRTX) and Life Storage (NYSE:LSI) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Valuation & Earnings

This table compares TPG RE Finance Trust and Life Storage’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TPG RE Finance Trust $266.90 million 5.38 $106.94 million $1.70 11.58
Life Storage $550.85 million 9.04 $206.59 million $5.51 19.38

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

Profitability

This table compares TPG RE Finance Trust and Life Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TPG RE Finance Trust 37.63% 8.38% 2.36%
Life Storage 37.17% 10.21% 5.28%

Analyst Ratings

This is a breakdown of current ratings and price targets for TPG RE Finance Trust and Life Storage, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TPG RE Finance Trust 0 0 0 0 N/A
Life Storage 1 3 3 0 2.29

Life Storage has a consensus target price of $107.43, suggesting a potential upside of 0.62%. Given Life Storage’s higher possible upside, analysts plainly believe Life Storage is more favorable than TPG RE Finance Trust.

Insider and Institutional Ownership

52.3% of TPG RE Finance Trust shares are held by institutional investors. Comparatively, 92.8% of Life Storage shares are held by institutional investors. 0.8% of TPG RE Finance Trust shares are held by company insiders. Comparatively, 0.8% of Life Storage shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

TPG RE Finance Trust pays an annual dividend of $1.72 per share and has a dividend yield of 8.7%. Life Storage pays an annual dividend of $4.00 per share and has a dividend yield of 3.7%. TPG RE Finance Trust pays out 101.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Life Storage pays out 72.6% of its earnings in the form of a dividend. Life Storage has raised its dividend for 2 consecutive years.

Risk and Volatility

TPG RE Finance Trust has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500. Comparatively, Life Storage has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Summary

Life Storage beats TPG RE Finance Trust on 13 of the 16 factors compared between the two stocks.

TPG RE Finance Trust Company Profile

TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in North America. It invests in commercial mortgage loans; and subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments secured by properties primarily in the office, mixed use, multifamily, industrial, retail, and hospitality real estate sectors. 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. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.

Life Storage Company Profile

Life Storage, Inc. is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self storage facilities. Located in Buffalo, New York, the Company operates more than 750 storage facilities in 28 states and Ontario, Canada. The Company serves both residential and commercial storage customers with storage units rented by month. Life Storage consistently provides responsive service to its 400,000-plus customers, making it a leader in the industry.

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