Critical Contrast: Centerspace (NYSE:CSR) versus Broadstone Net Lease (NYSE:BNL)

Broadstone Net Lease (NYSE:BNL) and Centerspace (NYSE:CSR) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Institutional & Insider Ownership

89.1% of Broadstone Net Lease shares are held by institutional investors. Comparatively, 79.0% of Centerspace shares are held by institutional investors. 0.8% of Broadstone Net Lease shares are held by company insiders. Comparatively, 0.9% of Centerspace 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.

Dividends

Broadstone Net Lease pays an annual dividend of $1.16 per share and has a dividend yield of 7.1%. Centerspace pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. Broadstone Net Lease pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Centerspace pays out -242.5% of its earnings in the form of a dividend.

Volatility & Risk

Broadstone Net Lease has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Centerspace has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares Broadstone Net Lease and Centerspace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadstone Net Lease	37.62%	5.10%	3.08%
Centerspace	-4.34%	-1.34%	-0.60%

Analyst Recommendations

This is a breakdown of current recommendations for Broadstone Net Lease and Centerspace, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadstone Net Lease	1	4	2	1	2.38
Centerspace	0	4	3	0	2.43

Broadstone Net Lease presently has a consensus price target of $18.60, suggesting a potential upside of 14.64%. Centerspace has a consensus price target of $74.43, suggesting a potential upside of 15.43%. Given Centerspace’s stronger consensus rating and higher probable upside, analysts plainly believe Centerspace is more favorable than Broadstone Net Lease.

Earnings and Valuation

This table compares Broadstone Net Lease and Centerspace”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadstone Net Lease	$431.80 million	7.08	$155.48 million	$0.87	18.65
Centerspace	$260.98 million	4.13	$41.97 million	($1.27)	-50.77

Broadstone Net Lease has higher revenue and earnings than Centerspace. Centerspace is trading at a lower price-to-earnings ratio than Broadstone Net Lease, indicating that it is currently the more affordable of the two stocks.

Summary

Broadstone Net Lease beats Centerspace on 12 of the 17 factors compared between the two stocks.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.

About Centerspace

Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune.