Terreno Realty Corporation (NYSE: TRNO) and Rexford Industrial Realty (NYSE:REXR) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Insider & Institutional Ownership

98.0% of Terreno Realty Corporation shares are held by institutional investors. Comparatively, 98.8% of Rexford Industrial Realty shares are held by institutional investors. 3.0% of Terreno Realty Corporation shares are held by company insiders. Comparatively, 2.1% of Rexford Industrial Realty shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Terreno Realty Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. Rexford Industrial Realty pays an annual dividend of $0.58 per share and has a dividend yield of 2.0%. Terreno Realty Corporation pays out 173.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rexford Industrial Realty pays out 128.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Terreno Realty Corporation has increased its dividend for 4 consecutive years. Terreno Realty Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Terreno Realty Corporation and Rexford Industrial Realty’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Terreno Realty Corporation $121.16 million 15.68 $65.43 million $0.46 79.43
Rexford Industrial Realty $139.65 million 14.77 $82.43 million $0.45 64.71

Rexford Industrial Realty has higher revenue and earnings than Terreno Realty Corporation. Rexford Industrial Realty is trading at a lower price-to-earnings ratio than Terreno Realty Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Terreno Realty Corporation has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Rexford Industrial Realty has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Terreno Realty Corporation and Rexford Industrial Realty, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Terreno Realty Corporation 0 4 5 0 2.56
Rexford Industrial Realty 0 3 1 0 2.25

Terreno Realty Corporation currently has a consensus target price of $33.86, suggesting a potential downside of 7.34%. Rexford Industrial Realty has a consensus target price of $23.75, suggesting a potential downside of 18.44%. Given Terreno Realty Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Terreno Realty Corporation is more favorable than Rexford Industrial Realty.

Profitability

This table compares Terreno Realty Corporation and Rexford Industrial Realty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Terreno Realty Corporation 20.91% 3.13% 1.95%
Rexford Industrial Realty 25.38% 3.72% 2.15%

Summary

Terreno Realty Corporation beats Rexford Industrial Realty on 10 of the 17 factors compared between the two stocks.

About Terreno Realty Corporation

Terreno Realty Corporation acquires, owns and operates industrial real estate in coastal markets in the United States, such as Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, District of Columbia (D.C.)/Baltimore. The Company invests in a range of industrial real estate, including warehouse/distribution, flex (including light industrial and research and development) and trans-shipment. As of December 31, 2016, the Company owned 166 buildings aggregating approximately 12 million square feet and five land parcels consisting of 22.8 acres. As of December 31, 2016, its properties were leased to 376 customers. The Company focuses on functional buildings in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which it operates.

About Rexford Industrial Realty

Rexford Industrial Realty, Inc. is a self-administered and self-managed full-service real estate investment trust (REIT). The Company is focused on owning, operating and acquiring industrial properties in Southern California infill markets. Rexford Industrial Realty, L.P. is the operating partnership of the Company. Through its controlling interest in Operating Partnership and its subsidiaries, the Company owns, manages, leases, acquires and develops industrial real estate located in Southern California infill markets, and from time to time, acquires or provides mortgage debt secured by industrial property. As of July 19, 2017, the Company’s consolidated portfolio consisted of 142 properties with approximately 17.7 million rentable square feet. In addition, the Company managed an additional 19 properties with approximately 1.2 million rentable square feet.

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