United Development Funding IV (OTCMKTS:UDFI) and Global Net Lease (NYSE:GNL) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
Insider & Institutional Ownership
57.4% of Global Net Lease shares are owned by institutional investors. 0.5% of United Development Funding IV shares are owned by company insiders. Comparatively, 0.2% of Global Net Lease shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 11.3%. United Development Funding IV does not pay a dividend. Global Net Lease pays out 99.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a breakdown of current ratings for United Development Funding IV and Global Net Lease, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Development Funding IV||0||0||0||0||N/A|
|Global Net Lease||0||2||1||0||2.33|
Global Net Lease has a consensus price target of $24.00, suggesting a potential upside of 27.05%. Given Global Net Lease’s higher possible upside, analysts clearly believe Global Net Lease is more favorable than United Development Funding IV.
Risk & Volatility
United Development Funding IV has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Global Net Lease has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.
This table compares United Development Funding IV and Global Net Lease’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Development Funding IV||N/A||N/A||N/A|
|Global Net Lease||3.86%||0.78%||0.34%|
Earnings and Valuation
This table compares United Development Funding IV and Global Net Lease’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Development Funding IV||N/A||N/A||N/A||N/A||N/A|
|Global Net Lease||$282.21 million||5.61||$10.90 million||$2.14||8.83|
Global Net Lease has higher revenue and earnings than United Development Funding IV.
Global Net Lease beats United Development Funding IV on 9 of the 11 factors compared between the two stocks.
About United Development Funding IV
United Development Funding IV invests in secured loans for the acquisition and development of land into single-family home lots, and the construction of model and new single-family homes. It also makes equity investments in residential real estate. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. United Development Funding IV was founded in 2008 and is headquartered in Grapevine, Texas.
About Global Net Lease
Global Net Lease, Inc. (NYSE: GNL) is a publicly traded real estate investment trust listed on the NYSE focused on acquiring a diversified global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States, Western and Northern Europe.
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