Critical Contrast: Prologis (PLD) and DCT Industrial Trust (DCT)
Prologis (NYSE: PLD) and DCT Industrial Trust (NYSE:DCT) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.
Valuation & Earnings
This table compares Prologis and DCT Industrial Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Prologis||$2.94 billion||11.25||$1.96 billion||$2.22||28.01|
|DCT Industrial Trust||$418.17 million||12.73||$286.65 million||$0.99||57.78|
Prologis has higher revenue and earnings than DCT Industrial Trust. Prologis is trading at a lower price-to-earnings ratio than DCT Industrial Trust, indicating that it is currently the more affordable of the two stocks.
This table compares Prologis and DCT Industrial Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|DCT Industrial Trust||22.20%||4.69%||2.43%|
Prologis pays an annual dividend of $1.76 per share and has a dividend yield of 2.8%. DCT Industrial Trust pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. Prologis pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DCT Industrial Trust pays out 125.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Prologis has raised its dividend for 3 consecutive years and DCT Industrial Trust has raised its dividend for 2 consecutive years. Prologis is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Prologis has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, DCT Industrial Trust has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.
Insider and Institutional Ownership
96.0% of Prologis shares are held by institutional investors. Comparatively, 95.4% of DCT Industrial Trust shares are held by institutional investors. 1.3% of Prologis shares are held by company insiders. Comparatively, 1.5% of DCT Industrial Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Prologis and DCT Industrial Trust, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|DCT Industrial Trust||0||4||2||0||2.33|
Prologis presently has a consensus target price of $59.36, indicating a potential downside of 4.54%. DCT Industrial Trust has a consensus target price of $51.67, indicating a potential downside of 9.67%. Given Prologis’ stronger consensus rating and higher possible upside, analysts clearly believe Prologis is more favorable than DCT Industrial Trust.
Prologis beats DCT Industrial Trust on 13 of the 17 factors compared between the two stocks.
Prologis Company Profile
Prologis, Inc. is a real estate investment trust (REIT) company. The Company is engaged in logistics real estate business. The Company’s segments include Real Estate Operations and Strategic Capital. The Real estate operations segment consists of rental operations and development. The Company’s strategic capital segment includes asset management services, as well as services performed for unconsolidated co-investment ventures. Its strategic capital segment gives the Company access to third-party capital, both private and public. As of December 31, 2016, the Company owned or had investments in, on an owned basis or through co-investment ventures, properties and development projects across 676 million square feet (63 million square meters) in 20 countries spanning four continents.
DCT Industrial Trust Company Profile
DCT Industrial Trust Inc. (DCT) is an industrial real estate company. The Company specializes in the ownership, acquisition, development, leasing and management of bulk-distribution and light-industrial properties located in various distribution markets in the United States. The Company operates through three segments: East, Central and West. As of December 31, 2016, the Company owned interests in approximately 74.0 million square feet of properties leased to various customers, including 64.7 million square feet consisting of 401 consolidated operating properties that were 97.2% occupied; 7.8 million square feet consisting of 23 unconsolidated properties that were 97.8% occupied; 0.3 million square feet consisting of three consolidated properties under redevelopment, and 1.2 million square feet consisting of four consolidated properties. As of December 31, 2016, the Company’s total consolidated portfolio consisted of 408 properties with an average size of 162,000 square feet.
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