Critical Contrast: JBG SMITH Properties (NYSE:JBGS) versus Orion Office REIT (NYSE:ONL)
by Tristan Rich · The Markets DailyOrion Office REIT (NYSE:ONL – Get Free Report) and JBG SMITH Properties (NYSE:JBGS – Get Free Report) are both small-cap real estate companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.
Dividends
Orion Office REIT pays an annual dividend of $0.08 per share and has a dividend yield of 3.3%. JBG SMITH Properties pays an annual dividend of $0.70 per share and has a dividend yield of 6.2%. Orion Office REIT pays out -4.7% of its earnings in the form of a dividend. JBG SMITH Properties pays out -26.8% 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. JBG SMITH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Orion Office REIT and JBG SMITH Properties”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Orion Office REIT | $147.65 million | 0.94 | -$139.31 million | ($1.69) | -1.44 |
| JBG SMITH Properties | $498.60 million | 1.32 | -$139.06 million | ($2.61) | -4.32 |
JBG SMITH Properties has higher revenue and earnings than Orion Office REIT. JBG SMITH Properties is trading at a lower price-to-earnings ratio than Orion Office REIT, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
79.9% of Orion Office REIT shares are held by institutional investors. Comparatively, 98.5% of JBG SMITH Properties shares are held by institutional investors. 1.6% of Orion Office REIT shares are held by company insiders. Comparatively, 11.9% of JBG SMITH Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of current ratings for Orion Office REIT and JBG SMITH Properties, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Orion Office REIT | 1 | 0 | 1 | 0 | 2.00 |
| JBG SMITH Properties | 3 | 0 | 0 | 0 | 1.00 |
Orion Office REIT presently has a consensus target price of $3.50, indicating a potential upside of 43.74%. JBG SMITH Properties has a consensus target price of $16.67, indicating a potential upside of 47.89%. Given JBG SMITH Properties’ higher probable upside, analysts plainly believe JBG SMITH Properties is more favorable than Orion Office REIT.
Profitability
This table compares Orion Office REIT and JBG SMITH Properties’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Orion Office REIT | -65.66% | -14.85% | -7.95% |
| JBG SMITH Properties | -29.89% | -13.31% | -3.49% |
Volatility and Risk
Orion Office REIT has a beta of 1.58, indicating that its stock price is 58% more volatile than the S&P 500. Comparatively, JBG SMITH Properties has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.
Summary
JBG SMITH Properties beats Orion Office REIT on 11 of the 16 factors compared between the two stocks.
About Orion Office REIT
Orion Office REIT specializes in the ownership, acquisition and management of a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S. The portfolio is leased primarily on a single-tenant net lease basis to creditworthy tenants. The company's team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.
About JBG SMITH Properties
JBG SMITH Properties is a real estate investment trust, which engages in owning, operating, investing in, and developing a portfolio of mixed-use properties. It operates through the following segments: Multifamily, Commercial, and Other. The Multifamily segment refers to the commercial buildings with public areas, retail spaces, and walkable streets. The Commercial segment rents to federal government tenants. The Other segment relates to development assets, corporate entities, land assets for which are the ground lessor and the elimination of inter-segment activity. The company was founded on October 27, 2016, and is headquartered in Bethesda, MD.