Reviewing Service Properties Trust (NASDAQ:SVC) & Cousins Properties (NYSE:CUZ)

Service Properties Trust (NASDAQ:SVC) and Cousins Properties (NYSE:CUZ) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Valuation & Earnings

This table compares Service Properties Trust and Cousins Properties”s 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	0.61	-$202.32 million	($1.42)	-1.20
Cousins Properties	$1.01 billion	4.33	$40.50 million	($0.03)	-883.83

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

Profitability

This table compares Service Properties Trust and Cousins Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Service Properties Trust	-13.59%	-38.18%	-3.58%
Cousins Properties	-0.52%	-0.11%	-0.06%

Dividends

Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 2.3%. Cousins Properties pays an annual dividend of $1.28 per share and has a dividend yield of 4.8%. Service Properties Trust pays out -2.8% of its earnings in the form of a dividend. Cousins Properties pays out -4,266.7% 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. Cousins Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

77.6% of Service Properties Trust shares are held by institutional investors. Comparatively, 94.4% of Cousins Properties shares are held by institutional investors. 1.6% of Service Properties Trust shares are held by insiders. Comparatively, 1.8% of Cousins Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Service Properties Trust and Cousins Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Service Properties Trust	1	2	2	0	2.20
Cousins Properties	1	2	6	0	2.56

Service Properties Trust presently has a consensus price target of $2.50, suggesting a potential upside of 46.20%. Cousins Properties has a consensus price target of $28.36, suggesting a potential upside of 6.97%. Given Service Properties Trust’s higher possible upside, research analysts clearly believe Service Properties Trust is more favorable than Cousins Properties.

Volatility and Risk

Service Properties Trust has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500. Comparatively, Cousins Properties has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Summary

Cousins Properties beats Service Properties Trust on 12 of the 16 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 Cousins Properties

Cousins Properties Incorporated ("Cousins") is a fully integrated, self-administered, and self-managed real estate investment trust (REIT). The Company, based in Atlanta and acting through its operating partnership, Cousins Properties LP, primarily invests in Class A office buildings located in high-growth Sun Belt markets. Founded in 1958, Cousins creates shareholder value through its extensive expertise in the development, acquisition, leasing, and management of high-quality real estate assets. The Company has a comprehensive strategy in place based on a simple platform, trophy assets, and opportunistic investments.