Comparing Postal Realty Trust (NYSE:PSTL) & Starwood Property Trust (NYSE:STWD)

Starwood Property Trust (NYSE:STWD) and Postal Realty Trust (NYSE:PSTL) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.

Volatility & Risk

Starwood Property Trust has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500. Comparatively, Postal Realty Trust has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Dividends

Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 9.9%. Postal Realty Trust pays an annual dividend of $0.96 per share and has a dividend yield of 6.7%. Starwood Property Trust pays out 138.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Postal Realty Trust pays out 960.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings for Starwood Property Trust and Postal Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starwood Property Trust	0	4	3	1	2.63
Postal Realty Trust	0	1	1	0	2.50

Starwood Property Trust presently has a consensus target price of $21.79, suggesting a potential upside of 12.12%. Postal Realty Trust has a consensus target price of $15.75, suggesting a potential upside of 10.76%. Given Starwood Property Trust’s stronger consensus rating and higher possible upside, equities analysts plainly believe Starwood Property Trust is more favorable than Postal Realty Trust.

Profitability

This table compares Starwood Property Trust and Postal Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starwood Property Trust	17.05%	10.03%	0.98%
Postal Realty Trust	4.93%	1.11%	0.59%

Earnings and Valuation

This table compares Starwood Property Trust and Postal Realty Trust’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starwood Property Trust	$2.05 billion	3.01	$339.21 million	$1.39	14.02
Postal Realty Trust	$68.45 million	4.71	$3.71 million	$0.10	142.30

Starwood Property Trust has higher revenue and earnings than Postal Realty Trust. Starwood Property Trust is trading at a lower price-to-earnings ratio than Postal Realty Trust, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

49.8% of Starwood Property Trust shares are held by institutional investors. Comparatively, 57.9% of Postal Realty Trust shares are held by institutional investors. 5.4% of Starwood Property Trust shares are held by insiders. Comparatively, 13.6% of Postal Realty Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Starwood Property Trust beats Postal Realty Trust on 13 of the 17 factors compared between the two stocks.

About Starwood Property Trust

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2009 and is headquartered in Greenwich, Connecticut.

About Postal Realty Trust

Postal Realty Trust, Inc. (NYSE: PSTL) is an internally managed real estate investment trust that owns properties primarily leased to the United States Postal Service ("USPS"). PSTL is focused on acquiring the network of USPS properties, which provide a critical element of the nation's logistics infrastructure that facilitates cost effective and efficient last-mile delivery solutions. As of December 31, 2023, PSTL owned 1,509 properties (including two properties accounted for as financing leases) located in 49 states and one territory comprising approximately 5.9 million net leasable interior square feet. Subsequent to quarter-end and through February 23, 2024, PSTL closed on eight additional properties comprising approximately 33,000 net leasable interior square feet.