Whitestone REIT (NYSE:WSR) and Elme Communities (NYSE:ELME) Head to Head Review

Whitestone REIT (NYSE:WSR) and Elme Communities (NYSE:ELME) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Volatility & Risk

Whitestone REIT has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Elme Communities has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Insider & Institutional Ownership

69.5% of Whitestone REIT shares are owned by institutional investors. Comparatively, 87.9% of Elme Communities shares are owned by institutional investors. 5.5% of Whitestone REIT shares are owned by company insiders. Comparatively, 1.2% of Elme Communities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Whitestone REIT and Elme Communities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Whitestone REIT	0	1	3	0	2.75
Elme Communities	0	3	1	0	2.25

Whitestone REIT currently has a consensus target price of $15.00, suggesting a potential upside of 5.26%. Elme Communities has a consensus target price of $17.33, suggesting a potential upside of 4.67%. Given Whitestone REIT’s stronger consensus rating and higher possible upside, equities analysts clearly believe Whitestone REIT is more favorable than Elme Communities.

Valuation and Earnings

This table compares Whitestone REIT and Elme Communities”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Whitestone REIT	$146.97 million	4.91	$19.18 million	$0.41	34.76
Elme Communities	$227.91 million	6.39	-$52.98 million	($0.15)	-110.39

Whitestone REIT has higher earnings, but lower revenue than Elme Communities. Elme Communities is trading at a lower price-to-earnings ratio than Whitestone REIT, indicating that it is currently the more affordable of the two stocks.

Dividends

Whitestone REIT pays an annual dividend of $0.50 per share and has a dividend yield of 3.5%. Elme Communities pays an annual dividend of $0.72 per share and has a dividend yield of 4.3%. Whitestone REIT pays out 122.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Elme Communities pays out -480.0% of its earnings in the form of a dividend. Elme Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Whitestone REIT and Elme Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Whitestone REIT	13.97%	4.98%	1.88%
Elme Communities	-5.51%	-1.17%	-0.70%

Summary

Whitestone REIT beats Elme Communities on 11 of the 16 factors compared between the two stocks.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy.

About Elme Communities

Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.