Head to Head Review: Easterly Government Properties (NYSE:DEA) versus Claros Mortgage Trust (NYSE:CMTG)

Claros Mortgage Trust (NYSE:CMTG) and Easterly Government Properties (NYSE:DEA) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Dividends

Claros Mortgage Trust pays an annual dividend of $0.40 per share and has a dividend yield of 16.8%. Easterly Government Properties pays an annual dividend of $1.80 per share and has a dividend yield of 7.6%. Claros Mortgage Trust pays out -12.0% of its earnings in the form of a dividend. Easterly Government Properties pays out 750.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Claros Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Claros Mortgage Trust has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Easterly Government Properties has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Earnings and Valuation

This table compares Claros Mortgage Trust and Easterly Government Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Claros Mortgage Trust	$119.55 million	2.79	-$489.07 million	($3.32)	-0.72
Easterly Government Properties	$348.97 million	3.14	$13.00 million	$0.24	98.16

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

Institutional & Insider Ownership

89.5% of Claros Mortgage Trust shares are held by institutional investors. Comparatively, 86.5% of Easterly Government Properties shares are held by institutional investors. 1.8% of Claros Mortgage Trust shares are held by company insiders. Comparatively, 6.5% of Easterly Government Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Claros Mortgage Trust and Easterly Government Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Claros Mortgage Trust	-267.14%	-19.34%	-6.27%
Easterly Government Properties	3.22%	0.82%	0.33%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Claros Mortgage Trust and Easterly Government Properties, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Claros Mortgage Trust	3	0	1	0	1.50
Easterly Government Properties	1	3	1	0	2.00

Claros Mortgage Trust currently has a consensus price target of $2.92, suggesting a potential upside of 22.81%. Easterly Government Properties has a consensus price target of $23.49, suggesting a potential downside of 0.29%. Given Claros Mortgage Trust’s higher possible upside, equities analysts plainly believe Claros Mortgage Trust is more favorable than Easterly Government Properties.

Summary

Easterly Government Properties beats Claros Mortgage Trust on 10 of the 15 factors compared between the two stocks.

About Claros Mortgage Trust

Claros Mortgage Trust, Inc. operates as a real estate investment trust. It focuses on originating senior and subordinate loans on transitional commercial real estate assets in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was incorporated in 2015 and is headquartered in New York, New York.

About Easterly Government Properties

Easterly Government Properties, Inc. (NYSE: DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).