Service Properties Trust (NASDAQ:SVC – Get Free Report) and Extra Space Storage (NYSE:EXR – Get Free Report) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.
Insider & Institutional Ownership
77.6% of Service Properties Trust shares are held by institutional investors. Comparatively, 99.1% of Extra Space Storage shares are held by institutional investors. 1.6% of Service Properties Trust shares are held by insiders. Comparatively, 1.0% of Extra Space Storage shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares Service Properties Trust and Extra Space Storage’s 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% |
| Extra Space Storage | 27.66% | 6.65% | 3.28% |
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Service Properties Trust | $1.81 billion | 0.62 | -$202.32 million | ($7.10) | -1.23 |
| Extra Space Storage | $3.41 billion | 9.29 | $974.00 million | $4.46 | 33.67 |
Extra Space Storage has higher revenue and earnings than Service Properties Trust. Service Properties Trust is trading at a lower price-to-earnings ratio than Extra Space Storage, indicating that it is currently the more affordable of the two stocks.
Dividends
Service Properties Trust pays an annual dividend of $0.20 per share and has a dividend yield of 2.3%. Extra Space Storage pays an annual dividend of $6.48 per share and has a dividend yield of 4.3%. Service Properties Trust pays out -2.8% of its earnings in the form of a dividend. Extra Space Storage pays out 145.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extra Space Storage has increased its dividend for 1 consecutive years. Extra Space Storage is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Service Properties Trust has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Extra Space Storage has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current recommendations for Service Properties Trust and Extra Space Storage, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Service Properties Trust | 2 | 1 | 3 | 0 | 2.17 |
| Extra Space Storage | 0 | 10 | 6 | 0 | 2.38 |
Service Properties Trust currently has a consensus target price of $12.81, suggesting a potential upside of 47.27%. Extra Space Storage has a consensus target price of $146.27, suggesting a potential downside of 2.59%. Given Service Properties Trust’s higher probable upside, analysts plainly believe Service Properties Trust is more favorable than Extra Space Storage.
Summary
Extra Space Storage beats Service Properties Trust on 13 of the 17 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 Extra Space Storage
Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of December 31, 2023, the Company owned and/or operated 3,714 self-storage stores in 42 states and Washington, D.C. The Company's stores comprise approximately 2.6 million units and approximately 283.0 million square feet of rentable space operating under the Extra Space, Life Storage and Storage Express brands. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. It is the largest operator of self-storage properties in the United States.
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