Contrasting Retail Opportunity Investments (NASDAQ:ROIC) & Franklin Street Properties (NYSE:FSP)

Franklin Street Properties (NYSE:FSP) and Retail Opportunity Investments (NASDAQ:ROIC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Franklin Street Properties and Retail Opportunity Investments, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Street Properties	0	0	0	0	0.00
Retail Opportunity Investments	1	6	0	0	1.86

Retail Opportunity Investments has a consensus price target of $16.20, indicating a potential downside of 7.48%. Given Retail Opportunity Investments’ stronger consensus rating and higher possible upside, analysts clearly believe Retail Opportunity Investments is more favorable than Franklin Street Properties.

Dividends

Franklin Street Properties pays an annual dividend of $0.04 per share and has a dividend yield of 2.4%. Retail Opportunity Investments pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. Franklin Street Properties pays out -6.3% of its earnings in the form of a dividend. Retail Opportunity Investments pays out 130.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

61.4% of Franklin Street Properties shares are held by institutional investors. Comparatively, 97.2% of Retail Opportunity Investments shares are held by institutional investors. 9.6% of Franklin Street Properties shares are held by company insiders. Comparatively, 3.0% of Retail Opportunity Investments shares are held by company 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.

Profitability

This table compares Franklin Street Properties and Retail Opportunity Investments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Street Properties	-43.90%	-7.79%	-5.30%
Retail Opportunity Investments	17.38%	4.32%	1.96%

Earnings and Valuation

This table compares Franklin Street Properties and Retail Opportunity Investments”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Street Properties	$115.99 million	1.52	-$52.72 million	($0.64)	-2.66
Retail Opportunity Investments	$327.73 million	6.89	$34.53 million	$0.46	38.07

Retail Opportunity Investments has higher revenue and earnings than Franklin Street Properties. Franklin Street Properties is trading at a lower price-to-earnings ratio than Retail Opportunity Investments, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Franklin Street Properties has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Retail Opportunity Investments has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Summary

Retail Opportunity Investments beats Franklin Street Properties on 13 of the 15 factors compared between the two stocks.

About Franklin Street Properties

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.

About Retail Opportunity Investments

Retail Opportunity Investments Corp. (Nasdaq: ROIC), is a fully integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated, metropolitan markets across the West Coast. As of December 31, 2023, ROIC owned 94 shopping centers encompassing approximately 10.6 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services, S&P Global Ratings and Fitch Ratings, Inc.