Analyzing Drive Shack (DS) and Communications Sales & Leasing,Inc. (UNIT)
Drive Shack (NYSE: DS) and Communications Sales & Leasing,Inc. (NASDAQ:UNIT) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.
Earnings & Valuation
This table compares Drive Shack and Communications Sales & Leasing,Inc.’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Drive Shack||$292.74 million||0.85||$8.22 million||($0.35)||-10.66|
|Communications Sales & Leasing,Inc.||$831.65 million||3.08||$681.10 million||($0.32)||-45.63|
Communications Sales & Leasing,Inc. has higher revenue and earnings than Drive Shack. Communications Sales & Leasing,Inc. is trading at a lower price-to-earnings ratio than Drive Shack, indicating that it is currently the more affordable of the two stocks.
Drive Shack pays an annual dividend of $0.24 per share and has a dividend yield of 6.4%. Communications Sales & Leasing,Inc. pays an annual dividend of $2.40 per share and has a dividend yield of 16.4%. Drive Shack pays out -68.6% of its earnings in the form of a dividend. Communications Sales & Leasing,Inc. pays out -750.0% 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. Communications Sales & Leasing,Inc. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Drive Shack has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Communications Sales & Leasing,Inc. has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Drive Shack and Communications Sales & Leasing,Inc., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Communications Sales & Leasing,Inc.||0||3||6||1||2.80|
Drive Shack presently has a consensus target price of $3.75, suggesting a potential upside of 0.54%. Communications Sales & Leasing,Inc. has a consensus target price of $30.25, suggesting a potential upside of 107.19%. Given Communications Sales & Leasing,Inc.’s stronger consensus rating and higher probable upside, analysts plainly believe Communications Sales & Leasing,Inc. is more favorable than Drive Shack.
Insider and Institutional Ownership
41.8% of Drive Shack shares are held by institutional investors. Comparatively, 68.2% of Communications Sales & Leasing,Inc. shares are held by institutional investors. 7.2% of Drive Shack shares are held by insiders. Comparatively, 0.4% of Communications Sales & Leasing,Inc. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares Drive Shack and Communications Sales & Leasing,Inc.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Communications Sales & Leasing,Inc.||-5.41%||N/A||-1.29%|
Communications Sales & Leasing,Inc. beats Drive Shack on 12 of the 17 factors compared between the two stocks.
About Drive Shack
Drive Shack Inc., formerly Newcastle Investment Corp., is a leisure company. The Company is an owner and operator of golf-related leisure and entertainment businesses. The Company’s portfolio consists of Drive Shack, which is engaged in developing nationwide network of golf entertainment venues; American Golf Corporation, which is a golf course company, and real estate-related assets. American Golf Corporation operates approximately 90 private, resort and public golf courses throughout the United States. It has a range of public and private golf courses in California, New York, and Georgia. It operates multiple facilities that provide golf, tennis, swimming and spa facilities, among others. Its online Pro Shop offers a range of golf gifts, such as personalized golf balls, golf luggage and accessories. Its public golf courses equipped with practice areas, golf shops, driving ranges, and food and beverage options.
About Communications Sales & Leasing,Inc.
Uniti Group Inc., formerly Communications Sales & Leasing, Inc., is an internally managed real estate investment trust engaged in the acquisition and construction of infrastructure in the communications industry. The Company focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. It operates in four segments: Leasing, Fiber Infrastructure, Towers and Consumer Competitive Local Exchange Carrier (Consumer CLEC). The Leasing segment includes Uniti Leasing. The Fiber Infrastructure segment includes Uniti Fiber business. The Towers segment includes Uniti Towers and its ground lease investments. The Consumer CLEC segment includes Talk America. As of July 3, 2017, the Company and its subsidiaries owned approximately 88,100 fiber network route miles, representing approximately 4.8 million fiber strand miles and approximately 231,900 route miles of copper cable lines across 32 states.
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