Analyzing Service Properties Trust (NASDAQ:SVC) & W.P. Carey (NYSE:WPC)

Service Properties Trust (NASDAQ:SVC) and W.P. Carey (NYSE:WPC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Risk & Volatility

Service Properties Trust has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, W.P. Carey has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

77.6% of Service Properties Trust shares are held by institutional investors. Comparatively, 73.7% of W.P. Carey shares are held by institutional investors. 1.4% of Service Properties Trust shares are held by insiders. Comparatively, 0.9% of W.P. Carey shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.9%. W.P. Carey pays an annual dividend of $3.68 per share and has a dividend yield of 5.3%. Service Properties Trust pays out -3.3% of its earnings in the form of a dividend. W.P. Carey pays out 174.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey has raised its dividend for 2 consecutive years. W.P. Carey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations for Service Properties Trust and W.P. Carey, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Service Properties Trust	1	3	0	0	1.75
W.P. Carey	1	7	3	0	2.18

Service Properties Trust presently has a consensus target price of $2.50, indicating a potential upside of 19.62%. W.P. Carey has a consensus target price of $71.90, indicating a potential upside of 2.71%. Given Service Properties Trust’s higher probable upside, analysts clearly believe Service Properties Trust is more favorable than W.P. Carey.

Valuation & Earnings

This table compares Service Properties Trust and W.P. Carey”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Service Properties Trust	$1.81 billion	0.19	-$202.32 million	($1.21)	-1.73
W.P. Carey	$1.72 billion	8.94	$466.36 million	$2.11	33.18

W.P. Carey has lower revenue, but higher earnings than Service Properties Trust. Service Properties Trust is trading at a lower price-to-earnings ratio than W.P. Carey, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Service Properties Trust and W.P. Carey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Service Properties Trust	-11.15%	-29.70%	-2.96%
W.P. Carey	27.17%	5.67%	2.62%

Summary

W.P. Carey beats Service Properties Trust on 11 of the 17 factors compared between the two stocks.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.

About W.P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.