Critical Survey: Orion Office REIT (NYSE:ONL) versus Modiv Industrial (NYSE:MDV)

Modiv Industrial (NYSE:MDV) and Orion Office REIT (NYSE:ONL) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares Modiv Industrial and Orion Office REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Modiv Industrial	1.80%	0.37%	0.16%
Orion Office REIT	-38.87%	-8.32%	-5.11%

Earnings & Valuation

This table compares Modiv Industrial and Orion Office REIT’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Modiv Industrial	$46.94 million	2.98	-$6.61 million	($0.47)	-31.47
Orion Office REIT	$195.04 million	1.21	-$57.30 million	($1.33)	-3.17

Modiv Industrial has higher earnings, but lower revenue than Orion Office REIT. Modiv Industrial 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 and Institutional Ownership

8.2% of Modiv Industrial shares are owned by institutional investors. Comparatively, 80.0% of Orion Office REIT shares are owned by institutional investors. 4.6% of Modiv Industrial shares are owned by company insiders. Comparatively, 0.2% of Orion Office REIT shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Modiv Industrial pays an annual dividend of $1.15 per share and has a dividend yield of 7.8%. Orion Office REIT pays an annual dividend of $0.40 per share and has a dividend yield of 9.5%. Modiv Industrial pays out -244.7% of its earnings in the form of a dividend. Orion Office REIT pays out -30.1% 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.

Analyst Ratings

This is a summary of recent recommendations for Modiv Industrial and Orion Office REIT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Modiv Industrial	0	0	1	0	3.00
Orion Office REIT	0	1	0	0	2.00

Modiv Industrial currently has a consensus target price of $18.00, indicating a potential upside of 21.70%. Given Modiv Industrial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Modiv Industrial is more favorable than Orion Office REIT.

Volatility and Risk

Modiv Industrial has a beta of -0.23, meaning that its stock price is 123% less volatile than the S&P 500. Comparatively, Orion Office REIT has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Summary

Modiv Industrial beats Orion Office REIT on 11 of the 16 factors compared between the two stocks.

About Modiv Industrial

Modiv Industrial, Inc. is an internally managed REIT that is focused on single-tenant net-lease industrial manufacturing real estate. The Company actively acquires critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen the nation's supply chains.

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.