Critical Analysis: Lineage (NASDAQ:LINE) and Rexford Industrial Realty (NYSE:REXR)

Rexford Industrial Realty (NYSE:REXR) and Lineage (NASDAQ:LINE) are both mid-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares Rexford Industrial Realty and Lineage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rexford Industrial Realty	-39.22%	-4.61%	-3.14%
Lineage	-3.15%	-1.85%	-0.89%

Analyst Ratings

This is a summary of current recommendations and price targets for Rexford Industrial Realty and Lineage, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rexford Industrial Realty	4	6	5	0	2.07
Lineage	3	9	5	0	2.12

Rexford Industrial Realty currently has a consensus target price of $41.00, indicating a potential upside of 10.52%. Lineage has a consensus target price of $44.20, indicating a potential upside of 17.58%. Given Lineage’s stronger consensus rating and higher possible upside, analysts clearly believe Lineage is more favorable than Rexford Industrial Realty.

Insider and Institutional Ownership

99.5% of Rexford Industrial Realty shares are held by institutional investors. 1.8% of Rexford Industrial Realty shares are held by company insiders. Comparatively, 71.6% of Lineage shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Rexford Industrial Realty has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Lineage has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares Rexford Industrial Realty and Lineage”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rexford Industrial Realty	$1.00 billion	8.25	$212.03 million	($1.81)	-20.50
Lineage	$5.36 billion	1.60	-$100.00 million	($0.72)	-52.21

Rexford Industrial Realty has higher earnings, but lower revenue than Lineage. Lineage is trading at a lower price-to-earnings ratio than Rexford Industrial Realty, indicating that it is currently the more affordable of the two stocks.

Dividends

Rexford Industrial Realty pays an annual dividend of $1.74 per share and has a dividend yield of 4.7%. Lineage pays an annual dividend of $2.13 per share and has a dividend yield of 5.7%. Rexford Industrial Realty pays out -96.1% of its earnings in the form of a dividend. Lineage pays out -295.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Rexford Industrial Realty has raised its dividend for 4 consecutive years. Lineage is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Lineage beats Rexford Industrial Realty on 10 of the 16 factors compared between the two stocks.

About Rexford Industrial Realty

Rexford Industrial Realty, Inc. is a self-administered and self-managed real estate investment trust, which engages in owning and operating industrial properties in infill markets. The company was founded by Richard S. Ziman on January 18, 2013 and is headquartered in Los Angeles, CA.

About Lineage

Lineage, Inc. is the world’s largest global temperature-controlled warehouse REIT with a network of over 480 strategically located facilities totaling over 84.1 million square feet and 3.0 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific. Coupling end-to-end supply chain solutions and technology, Lineage partners with some of the world’s largest food and beverage producers, retailers, and distributors to help increase distribution efficiency, advance sustainability, minimize supply chain waste, and, most importantly, feed the world.