Orion Office REIT (NYSE:ONL) versus Public Storage (NYSE:PSA) Critical Analysis

Orion Office REIT (NYSE:ONL) and Public Storage (NYSE:PSA) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitability, earnings, institutional ownership, analyst recommendations, valuation and dividends.

Valuation and Earnings

This table compares Orion Office REIT and Public Storage”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion Office REIT	$195.04 million	1.21	-$57.30 million	($1.65)	-2.56
Public Storage	$4.52 billion	13.39	$2.15 billion	$10.67	32.39

Public Storage has higher revenue and earnings than Orion Office REIT. Orion Office REIT is trading at a lower price-to-earnings ratio than Public Storage, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

80.0% of Orion Office REIT shares are owned by institutional investors. Comparatively, 78.8% of Public Storage shares are owned by institutional investors. 0.4% of Orion Office REIT shares are owned by insiders. Comparatively, 11.1% of Public Storage shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Orion Office REIT has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Public Storage has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Dividends

Orion Office REIT pays an annual dividend of $0.40 per share and has a dividend yield of 9.5%. Public Storage pays an annual dividend of $12.00 per share and has a dividend yield of 3.5%. Orion Office REIT pays out -24.2% of its earnings in the form of a dividend. Public Storage pays out 112.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orion Office REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orion Office REIT	-51.47%	-10.69%	-6.56%
Public Storage	44.88%	36.55%	10.52%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Orion Office REIT and Public Storage, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion Office REIT	0	1	0	0	2.00
Public Storage	1	6	6	2	2.60

Public Storage has a consensus target price of $337.00, indicating a potential downside of 2.49%. Given Public Storage’s stronger consensus rating and higher possible upside, analysts plainly believe Public Storage is more favorable than Orion Office REIT.

Summary

Public Storage beats Orion Office REIT on 12 of the 16 factors compared between the two stocks.

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.

About Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns, and operates self-storage facilities. At December 31, 2023, we had: (i) interests in 3,044 self-storage facilities located in 40 states with approximately 218 million net rentable square feet in the United States and (ii) a 35% common equity interest in Shurgard Self Storage Limited (Euronext Brussels: SHUR), which owned 275 self-storage facilities located in seven Western European nations with approximately 15 million net rentable square feet operated under the Shurgard brand. Our headquarters are located in Glendale, California.