Sila Realty Trust (NYSE:SILA) versus Service Properties Trust (NASDAQ:SVC) Financial Analysis

Sila Realty Trust (NYSE:SILA) and Service Properties Trust (NASDAQ:SVC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares Sila Realty Trust and Service Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sila Realty Trust	19.86%	2.80%	1.89%
Service Properties Trust	-14.83%	-37.94%	-3.97%

Risk & Volatility

Sila Realty Trust has a beta of -0.02, meaning that its stock price is 102% less volatile than the S&P 500. Comparatively, Service Properties Trust has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Earnings and Valuation

This table compares Sila Realty Trust and Service Properties Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sila Realty Trust	$186.86 million	7.43	$42.66 million	$0.69	36.49
Service Properties Trust	$1.90 billion	0.19	-$275.53 million	($1.67)	-1.30

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

Insider & Institutional Ownership

77.6% of Service Properties Trust shares are held by institutional investors. 0.8% of Sila Realty Trust shares are held by company insiders. Comparatively, 1.4% of Service Properties Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Sila Realty Trust and Service Properties Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sila Realty Trust	0	3	1	0	2.25
Service Properties Trust	1	3	0	0	1.75

Sila Realty Trust presently has a consensus price target of $26.67, indicating a potential upside of 5.90%. Service Properties Trust has a consensus price target of $2.50, indicating a potential upside of 15.21%. Given Service Properties Trust’s higher possible upside, analysts clearly believe Service Properties Trust is more favorable than Sila Realty Trust.

Dividends

Sila Realty Trust pays an annual dividend of $1.60 per share and has a dividend yield of 6.4%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.8%. Sila Realty Trust pays out 231.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Service Properties Trust pays out -2.4% of its earnings in the form of a dividend.

Summary

Sila Realty Trust beats Service Properties Trust on 10 of the 16 factors compared between the two stocks.

About Sila Realty Trust

Sila Realty Trust, Inc., headquartered in Tampa, Florida, is a net lease real estate investment trust with a strategic focus on investing in the large, growing, and resilient healthcare sector. The Company invests in high quality healthcare facilities along the continuum of care, which, we believe, generate predictable, durable, and growing income streams. Our portfolio comprises high quality tenants in geographically diverse facilities, which are positioned to capitalize on the dynamic delivery of healthcare to patients. As of June 30, 2024, the Company owned 137 real estate properties and two undeveloped land parcels located in 64 markets across the U.S.

About Service Properties Trust

Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.