Contrasting Postal Realty Trust (NYSE:PSTL) & SL Green Realty (NYSE:SLG)

Postal Realty Trust (NYSE:PSTL) and SL Green Realty (NYSE:SLG) are both real estate companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Risk & Volatility

Postal Realty Trust has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, SL Green Realty has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Valuation & Earnings

This table compares Postal Realty Trust and SL Green Realty”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Postal Realty Trust	$95.82 million	6.94	$14.15 million	$0.54	44.58
SL Green Realty	$1.00 billion	3.66	-$88.28 million	($2.73)	-18.92

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

Dividends

Postal Realty Trust pays an annual dividend of $0.98 per share and has a dividend yield of 4.1%. SL Green Realty pays an annual dividend of $2.47 per share and has a dividend yield of 4.8%. Postal Realty Trust pays out 181.5% 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 -90.5% of its earnings in the form of a dividend. Postal Realty Trust has increased its dividend for 3 consecutive years and SL Green Realty has increased its dividend for 1 consecutive years. SL Green Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Postal Realty Trust	16.42%	4.63%	2.22%
SL Green Realty	-16.92%	-4.37%	-1.53%

Institutional & Insider Ownership

57.9% of Postal Realty Trust shares are held by institutional investors. Comparatively, 90.0% of SL Green Realty shares are held by institutional investors. 12.5% of Postal Realty Trust shares are held by insiders. Comparatively, 5.9% of SL Green Realty shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Postal Realty Trust and SL Green Realty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Postal Realty Trust	0	2	6	0	2.75
SL Green Realty	2	10	7	0	2.26

Postal Realty Trust presently has a consensus target price of $25.38, suggesting a potential upside of 5.41%. SL Green Realty has a consensus target price of $57.27, suggesting a potential upside of 10.89%. Given SL Green Realty’s higher probable upside, analysts clearly believe SL Green Realty is more favorable than Postal Realty Trust.

Summary

Postal Realty Trust beats SL Green Realty on 10 of the 17 factors compared between the two stocks.

About Postal Realty Trust

Postal Realty Trust, Inc. (NYSE: PSTL) is an internally managed real estate investment trust that owns properties primarily leased to the United States Postal Service ("USPS"). PSTL is focused on acquiring the network of USPS properties, which provide a critical element of the nation's logistics infrastructure that facilitates cost effective and efficient last-mile delivery solutions. As of December 31, 2023, PSTL owned 1,509 properties (including two properties accounted for as financing leases) located in 49 states and one territory comprising approximately 5.9 million net leasable interior square feet. Subsequent to quarter-end and through February 23, 2024, PSTL closed on eight additional properties comprising approximately 33,000 net leasable interior square feet.

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.