NETSTREIT (NYSE:NTST – Get Free Report) and RLJ Lodging Trust (NYSE:RLJ – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.
Insider & Institutional Ownership
92.3% of RLJ Lodging Trust shares are held by institutional investors. 0.5% of NETSTREIT shares are held by company insiders. Comparatively, 2.6% of RLJ Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations and price targets for NETSTREIT and RLJ Lodging Trust, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NETSTREIT | 1 | 3 | 5 | 0 | 2.44 |
| RLJ Lodging Trust | 1 | 3 | 4 | 0 | 2.38 |
Valuation and Earnings
This table compares NETSTREIT and RLJ Lodging Trust’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NETSTREIT | $137.21 million | 8.27 | $6.84 million | $0.09 | 171.78 |
| RLJ Lodging Trust | $1.35 billion | 1.04 | $76.40 million | $0.28 | 32.00 |
RLJ Lodging Trust has higher revenue and earnings than NETSTREIT. RLJ Lodging Trust is trading at a lower price-to-earnings ratio than NETSTREIT, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
NETSTREIT has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, RLJ Lodging Trust has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500.
Profitability
This table compares NETSTREIT and RLJ Lodging Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NETSTREIT | 3.32% | 0.39% | 0.25% |
| RLJ Lodging Trust | 4.93% | 3.34% | 1.35% |
Dividends
NETSTREIT pays an annual dividend of $0.84 per share and has a dividend yield of 5.4%. RLJ Lodging Trust pays an annual dividend of $0.60 per share and has a dividend yield of 6.7%. NETSTREIT pays out 933.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust pays out 214.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLJ Lodging Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
RLJ Lodging Trust beats NETSTREIT on 12 of the 16 factors compared between the two stocks.
About NETSTREIT
NETSTREIT Corp. is an internally managed real estate investment trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT's strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.
About RLJ Lodging Trust
RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.
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