Reviewing Franklin Street Properties (NYSE:FSP) and JBG SMITH Properties (NYSE:JBGS)

Franklin Street Properties (NYSE:FSP) and JBG SMITH Properties (NYSE:JBGS) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Franklin Street Properties and JBG SMITH Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Street Properties	-52.85%	-10.06%	-6.46%
JBG SMITH Properties	-25.40%	-6.64%	-2.69%

Dividends

Franklin Street Properties pays an annual dividend of $0.04 per share and has a dividend yield of 2.3%. JBG SMITH Properties pays an annual dividend of $0.70 per share and has a dividend yield of 3.7%. Franklin Street Properties pays out -7.1% of its earnings in the form of a dividend. JBG SMITH Properties pays out -50.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. JBG SMITH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

61.4% of Franklin Street Properties shares are owned by institutional investors. Comparatively, 98.5% of JBG SMITH Properties shares are owned by institutional investors. 6.2% of Franklin Street Properties shares are owned by insiders. Comparatively, 3.7% of JBG SMITH Properties shares are owned 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.

Analyst Ratings

This is a summary of recent recommendations for Franklin Street Properties and JBG SMITH Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Street Properties	0	0	0	0	N/A
JBG SMITH Properties	1	0	0	0	1.00

JBG SMITH Properties has a consensus target price of $17.00, suggesting a potential downside of 9.04%. Given JBG SMITH Properties’ higher probable upside, analysts plainly believe JBG SMITH Properties is more favorable than Franklin Street Properties.

Earnings & Valuation

This table compares Franklin Street Properties and JBG SMITH Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Street Properties	$133.73 million	1.36	-$48.11 million	($0.56)	-3.14
JBG SMITH Properties	$579.65 million	2.85	-$79.98 million	($1.39)	-13.45

Franklin Street Properties has higher earnings, but lower revenue than JBG SMITH Properties. JBG SMITH Properties is trading at a lower price-to-earnings ratio than Franklin Street Properties, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Franklin Street Properties has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, JBG SMITH Properties has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Summary

JBG SMITH Properties beats Franklin Street Properties on 10 of the 14 factors compared between the two stocks.

About Franklin Street Properties

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.

About JBG SMITH Properties

JBG SMITH owns, operates, invests in, and develops mixed-use properties in high growth and high barrier-to-entry submarkets in and around Washington, DC, most notably National Landing. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, DC metropolitan area. Approximately 75.0% of JBG SMITH's holdings are in the National Landing submarket in Northern Virginia, which is anchored by four key demand drivers: Amazon's new headquarters; Virginia Tech's under-construction $1 billion Innovation Campus; the submarket's proximity to the Pentagon; and JBG SMITH's deployment of 5G digital infrastructure. JBG SMITH's dynamic portfolio currently comprises 14.2 million square feet of high-growth office, multifamily, and retail assets at share, 99% of which are Metro-served. It also maintains a development pipeline encompassing 8.8 million square feet of mixed-use, primarily multifamily, development opportunities. JBG SMITH is committed to the operation and development of green, smart, and healthy buildings and plans to maintain carbon neutral operations annually.