Net Lease Office Properties (NYSE:NLOP) and Simon Property Group (NYSE:SPG) Critical Analysis

Net Lease Office Properties (NYSE:NLOP) and Simon Property Group (NYSE:SPG) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Dividends

Net Lease Office Properties pays an annual dividend of $0.34 per share and has a dividend yield of 1.1%. Simon Property Group pays an annual dividend of $8.20 per share and has a dividend yield of 4.9%. Simon Property Group pays out 104.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

58.3% of Net Lease Office Properties shares are held by institutional investors. Comparatively, 93.0% of Simon Property Group shares are held by institutional investors. 8.5% of Simon Property Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Net Lease Office Properties and Simon Property Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Net Lease Office Properties	$172.53 million	2.59	-$131.75 million	N/A	N/A
Simon Property Group	$5.66 billion	9.67	$2.28 billion	$7.85	21.38

Simon Property Group has higher revenue and earnings than Net Lease Office Properties.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Net Lease Office Properties and Simon Property Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Net Lease Office Properties	0	0	1	0	3.00
Simon Property Group	0	6	3	0	2.33

Net Lease Office Properties presently has a consensus price target of $46.00, suggesting a potential upside of 52.17%. Simon Property Group has a consensus price target of $162.78, suggesting a potential downside of 3.01%. Given Net Lease Office Properties’ stronger consensus rating and higher probable upside, analysts plainly believe Net Lease Office Properties is more favorable than Simon Property Group.

Profitability

This table compares Net Lease Office Properties and Simon Property Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Net Lease Office Properties	N/A	-30.98%	-17.28%
Simon Property Group	45.90%	78.14%	7.98%

Summary

Simon Property Group beats Net Lease Office Properties on 10 of the 13 factors compared between the two stocks.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.

About Simon Property Group

Simon Property Group, Inc. (NYSE:SPG) is a self-administered and self-managed real estate investment trust (REIT). Simon Property Group, L.P., or the Operating Partnership, is our majority-owned partnership subsidiary that owns all of our real estate properties and other assets. In this package, the terms Simon, we, our, or the Company refer to Simon Property Group, Inc., the Operating Partnership, and its subsidiaries. We own, develop and manage premier shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets, The Mills, and International Properties. At June 30, 2024, we owned or had an interest in 230 properties comprising 183 million square feet in North America, Asia and Europe. We also owned an 84% interest in The Taubman Realty Group, or TRG, which owns 22 regional, super-regional, and outlet malls in the U.S. and Asia. Additionally, at June 30, 2024, we had a 22.4% ownership interest in Klépierre, a publicly traded, Paris-based real estate company, which owns shopping centers in 14 European countries.