Piedmont Office Realty Trust (NYSE: PDM) and Gramercy Property Trust (NYSE:GPT) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Insider & Institutional Ownership

86.4% of Piedmont Office Realty Trust shares are held by institutional investors. Comparatively, 87.0% of Gramercy Property Trust shares are held by institutional investors. 0.8% of Piedmont Office Realty Trust shares are held by insiders. Comparatively, 1.4% of Gramercy Property Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Piedmont Office Realty Trust and Gramercy Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piedmont Office Realty Trust 9.71% 2.67% 1.29%
Gramercy Property Trust 4.35% 0.81% 0.40%

Risk and Volatility

Piedmont Office Realty Trust has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Gramercy Property Trust has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Piedmont Office Realty Trust and Gramercy Property Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piedmont Office Realty Trust 0 1 0 0 2.00
Gramercy Property Trust 0 2 2 0 2.50

Piedmont Office Realty Trust presently has a consensus target price of $20.50, suggesting a potential upside of 1.18%. Gramercy Property Trust has a consensus target price of $34.00, suggesting a potential upside of 15.37%. Given Gramercy Property Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Gramercy Property Trust is more favorable than Piedmont Office Realty Trust.

Dividends

Piedmont Office Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 4.1%. Gramercy Property Trust pays an annual dividend of $1.50 per share and has a dividend yield of 5.1%. Piedmont Office Realty Trust pays out 221.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gramercy Property Trust pays out 1,666.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Piedmont Office Realty Trust has increased its dividend for 2 consecutive years and Gramercy Property Trust has increased its dividend for 3 consecutive years. Gramercy Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Piedmont Office Realty Trust and Gramercy Property Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Piedmont Office Realty Trust $579.79 million 5.08 $263.29 million $0.38 53.32
Gramercy Property Trust $525.64 million 8.52 $368.69 million $0.09 327.48

Gramercy Property Trust has higher revenue, but lower earnings than Piedmont Office Realty Trust. Piedmont Office Realty Trust is trading at a lower price-to-earnings ratio than Gramercy Property Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Gramercy Property Trust beats Piedmont Office Realty Trust on 10 of the 17 factors compared between the two stocks.

About Piedmont Office Realty Trust

Piedmont Office Realty Trust, Inc. is an integrated self-managed real estate investment trust (REIT). The Company’s business consists primarily of owning, managing, operating, leasing, acquiring, developing, investing in, and disposing of office real estate assets. As of December 31, 2016, the Company owned and operated 65 in-service office properties, one redevelopment asset, two development assets and one office building through an unconsolidated joint venture. Its properties are located in areas, including New York, Chicago, Atlanta, Dallas, Boston, Minneapolis and Orlando. Its tenant base includes industries, such as business services, depository institutions, educational services, real estate, legal services and insurance carriers. The Company conducts business primarily through Piedmont Operating Partnership, L.P. (Piedmont OP). It performs the management of its buildings through its subsidiaries, including Piedmont Government Services, LLC and Piedmont Office Management, LLC.

About Gramercy Property Trust

Gramercy Property Trust is a real estate investment trust (REIT), which is an investor and asset manager of commercial real estate. The Company’s operating segments include Investments/Corporate and Asset Management. The Investments/Corporate segment includes all of its activities related to the investment and ownership of commercial properties located throughout the United States and Europe. The Asset Management segment includes substantially all of its activities related to asset and property management of commercial properties located throughout the United States and Europe. It is engaged in acquiring and managing single-tenant, net leased industrial, office and specialty properties. It focuses on income producing properties leased to tenants in markets in the United States and Europe. It earns revenues through rental revenues on properties that it owns in the United States and asset management revenues on properties owned by third parties in the United States and Europe.

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