Critical Comparison: Net Lease Office Properties (NYSE:NLOP) versus Kilroy Realty (NYSE:KRC)

Kilroy Realty (NYSE:KRC) and Net Lease Office Properties (NYSE:NLOP) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Kilroy Realty and Net Lease Office Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kilroy Realty	1	6	3	0	2.20
Net Lease Office Properties	0	0	1	0	3.00

Kilroy Realty presently has a consensus price target of $38.90, indicating a potential upside of 11.30%. Net Lease Office Properties has a consensus price target of $46.00, indicating a potential upside of 41.23%. Given Net Lease Office Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Net Lease Office Properties is more favorable than Kilroy Realty.

Insider and Institutional Ownership

94.2% of Kilroy Realty shares are held by institutional investors. Comparatively, 58.3% of Net Lease Office Properties shares are held by institutional investors. 1.6% of Kilroy Realty shares are held by insiders. Comparatively, 0.7% of Net Lease Office Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Kilroy Realty and Net Lease Office Properties”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kilroy Realty	$1.14 billion	3.64	$210.97 million	$1.68	20.80
Net Lease Office Properties	$142.25 million	3.39	-$91.47 million	($4.28)	-7.61

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

Risk & Volatility

Kilroy Realty has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Net Lease Office Properties has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Kilroy Realty and Net Lease Office Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kilroy Realty	17.74%	3.57%	1.79%
Net Lease Office Properties	-49.54%	-10.26%	-7.11%

Summary

Kilroy Realty beats Net Lease Office Properties on 12 of the 14 factors compared between the two stocks.

About Kilroy Realty

Kilroy Realty Corporation (NYSE: KRC, the company, Kilroy) is a leading U.S. landlord and developer, with operations in San Diego, Greater Los Angeles, the San Francisco Bay Area, Greater Seattle and Austin. The company has earned global recognition for sustainability, building operations, innovation and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the company's approach to modern business environments helps drive creativity and productivity for some of the world's leading technology, entertainment, life science and business services companies. The company is a publicly traded real estate investment trust (REIT) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office, life science and mixed-use projects. As of December 31, 2023, Kilroy's stabilized portfolio totaled approximately 17.0 million square feet of primarily office and life science space that was 85.0% occupied and 86.4% leased. The company also had approximately 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 92.5%. In addition, the company had two in-process life science redevelopment projects totaling approximately 100,000 square feet with total estimated redevelopment costs of $80.0 million and one approximately 875,000 square foot in-process development project with a total estimated investment of $1.0 billion.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.