Contrasting Gladstone Commercial (NASDAQ:GOOD) and SL Green Realty (NYSE:SLG)

Gladstone Commercial (NASDAQ:GOOD) and SL Green Realty (NYSE:SLG) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Dividends

Gladstone Commercial pays an annual dividend of $1.20 per share and has a dividend yield of 10.8%. SL Green Realty pays an annual dividend of $3.09 per share and has a dividend yield of 6.3%. Gladstone Commercial pays out 666.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty pays out 30,900.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty has increased its dividend for 1 consecutive years. Gladstone Commercial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Gladstone Commercial and SL Green Realty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gladstone Commercial	$149.39 million	3.61	$24.00 million	$0.18	61.89
SL Green Realty	$886.27 million	3.93	$30.65 million	$0.01	4,883.00

SL Green Realty has higher revenue and earnings than Gladstone Commercial. Gladstone Commercial is trading at a lower price-to-earnings ratio than SL Green Realty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Gladstone Commercial and SL Green Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gladstone Commercial	13.59%	11.77%	1.78%
SL Green Realty	1.75%	-0.22%	-0.08%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Gladstone Commercial and SL Green Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gladstone Commercial	0	3	0	0	2.00
SL Green Realty	2	9	6	0	2.24

Gladstone Commercial presently has a consensus price target of $12.00, suggesting a potential upside of 7.72%. SL Green Realty has a consensus price target of $56.83, suggesting a potential upside of 16.39%. Given SL Green Realty’s stronger consensus rating and higher possible upside, analysts plainly believe SL Green Realty is more favorable than Gladstone Commercial.

Insider & Institutional Ownership

45.5% of Gladstone Commercial shares are held by institutional investors. Comparatively, 90.0% of SL Green Realty shares are held by institutional investors. 1.4% of Gladstone Commercial shares are held by insiders. Comparatively, 5.0% of SL Green Realty shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Gladstone Commercial has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, SL Green Realty has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Summary

SL Green Realty beats Gladstone Commercial on 11 of the 17 factors compared between the two stocks.

About Gladstone Commercial

Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Including payments through January 2024, Gladstone Commercial has paid 229 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, Gladstone Commercial paid five consecutive quarterly cash distributions. Gladstone Commercial has never skipped or deferred a distribution since its inception in 2003.

About SL Green Realty

3SL Green Realty Corp., Manhattan’s largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of June 30, 2022, SL Green held interests in 64 buildings totaling 34.4 million square feet. This included ownership interests in 26.3 million square feet of Manhattan buildings and 7.2 million square feet securing debt and preferred equity investments.