Alexandria Real Estate Equities (ARE) and Columbia Property Trust (CXP) Critical Comparison
Alexandria Real Estate Equities (NYSE: ARE) and Columbia Property Trust (NYSE:CXP) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.
Alexandria Real Estate Equities pays an annual dividend of $3.44 per share and has a dividend yield of 2.9%. Columbia Property Trust pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. Alexandria Real Estate Equities pays out 860.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Columbia Property Trust pays out 70.2% of its earnings in the form of a dividend. Alexandria Real Estate Equities has increased its dividend for 6 consecutive years. Columbia Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Alexandria Real Estate Equities and Columbia Property Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alexandria Real Estate Equities||9.45%||3.11%||1.49%|
|Columbia Property Trust||37.27%||5.55%||3.30%|
This is a summary of current ratings and recommmendations for Alexandria Real Estate Equities and Columbia Property Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alexandria Real Estate Equities||0||0||3||0||3.00|
|Columbia Property Trust||0||3||4||0||2.57|
Alexandria Real Estate Equities currently has a consensus price target of $126.00, suggesting a potential upside of 5.91%. Columbia Property Trust has a consensus price target of $23.80, suggesting a potential upside of 9.32%. Given Columbia Property Trust’s higher possible upside, analysts clearly believe Columbia Property Trust is more favorable than Alexandria Real Estate Equities.
Institutional and Insider Ownership
64.8% of Columbia Property Trust shares are owned by institutional investors. 1.6% of Alexandria Real Estate Equities shares are owned by company insiders. Comparatively, 0.5% of Columbia Property Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Alexandria Real Estate Equities and Columbia Property Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alexandria Real Estate Equities||$1.02 billion||10.92||$639.55 million||$0.40||297.43|
|Columbia Property Trust||$376.05 million||7.02||$171.48 million||$1.14||19.10|
Alexandria Real Estate Equities has higher revenue and earnings than Columbia Property Trust. Columbia Property Trust is trading at a lower price-to-earnings ratio than Alexandria Real Estate Equities, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Alexandria Real Estate Equities has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Columbia Property Trust has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
Columbia Property Trust beats Alexandria Real Estate Equities on 10 of the 17 factors compared between the two stocks.
About Alexandria Real Estate Equities
Alexandria Real Estate Equities, Inc. is a real estate investment (REIT). The Company is engaged in the business of providing space for lease to the life science and technology industries. It focuses on collaborative life science and technology campuses. It develops urban cluster campuses and ecosystems. As of December 31, 2016, the Company had 199 properties in North America. As of December 31, 2016, its asset base in North America consisted of 25.2 million square feet, including 19.9 million rentable square feet/foot (RSF) of operating properties, and development and redevelopment of under construction or pre-construction, as well as 5.3 million square feet of future ground-up development projects. Its properties are located in various areas, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle Park. Its properties include Alexandria Technology Square, Alexandria Park at 128 and Alexandria Technology Center-Gateway.
About Columbia Property Trust
Columbia Property Trust, Inc. operates as a real estate investment trust (REIT), which owns and operates commercial real estate properties. The Company’s primary objective is to generate long-term shareholder returns from a combination of steadily growing cash flows and appreciation in its net asset values, through the acquisition and ownership of office buildings located principally in high-barrier-to-entry markets. The Company’s segments include New York, San Francisco, Atlanta, Washington, D.C., Boston, Los Angeles and all other office markets. The all other office markets segment consists of properties in similar, low-barrier to entry geographic locations, in which the Company does not plan to make further investments. The Company conducts its business primarily through Columbia Property Trust Operating Partnership, L.P. (Columbia Property Trust OP), which acquires, develops, owns, leases and operates real properties directly through subsidiaries or through joint ventures.
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