NorthStar Realty Europe Corp. (NYSE: NRE) and Parkway Properties (NYSE:PKY) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Profitability

This table compares NorthStar Realty Europe Corp. and Parkway Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NorthStar Realty Europe Corp. -18.57% 7.73% 2.46%
Parkway Properties N/A -4.40% -2.55%

Insider & Institutional Ownership

69.9% of NorthStar Realty Europe Corp. shares are held by institutional investors. Comparatively, 97.1% of Parkway Properties shares are held by institutional investors. 2.2% of NorthStar Realty Europe Corp. shares are held by insiders. Comparatively, 4.9% of Parkway Properties shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.5%. Parkway Properties pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. NorthStar Realty Europe Corp. pays out -133.3% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares NorthStar Realty Europe Corp. and Parkway Properties’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NorthStar Realty Europe Corp. $131.25 million 5.65 $37.01 million ($0.45) -29.82
Parkway Properties $182.22 million 6.33 $54.29 million N/A N/A

Parkway Properties has higher revenue and earnings than NorthStar Realty Europe Corp..

Analyst Ratings

This is a breakdown of recent recommendations and price targets for NorthStar Realty Europe Corp. and Parkway Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NorthStar Realty Europe Corp. 0 0 1 0 3.00
Parkway Properties 0 3 1 0 2.25

NorthStar Realty Europe Corp. presently has a consensus price target of $16.50, indicating a potential upside of 22.95%. Parkway Properties has a consensus price target of $22.50, indicating a potential downside of 2.30%. Given NorthStar Realty Europe Corp.’s stronger consensus rating and higher possible upside, analysts clearly believe NorthStar Realty Europe Corp. is more favorable than Parkway Properties.

Volatility & Risk

NorthStar Realty Europe Corp. has a beta of 2.49, suggesting that its share price is 149% more volatile than the S&P 500. Comparatively, Parkway Properties has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Summary

NorthStar Realty Europe Corp. beats Parkway Properties on 7 of the 13 factors compared between the two stocks.

NorthStar Realty Europe Corp. Company Profile

NorthStar Realty Europe Corp. is a real estate investment trust (REIT). The Company is a European focused commercial real estate company with primary office properties in cities within Germany, the United Kingdom and France. Its objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time. The Company conducts its business through two segments: Real Estate and Corporate. Its European commercial real estate business is primarily focused on office properties. Its portfolio consists of approximately 48 properties and a total of approximately 495,588 square meters of rentable space, located in various European markets, including Frankfurt, Hamburg, Berlin, London, Paris, Amsterdam, Milan, Brussels and Madrid. Its overall portfolio is over 87% occupied. In addition, it owns over two hotels, which are leased to third-party operators. It is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NSAM).

Parkway Properties Company Profile

Parkway, Inc. is a self-managed real estate investment trust (REIT). The Company owns and operates office properties located in submarkets in Houston, Texas. As of December 31, 2016, the Company’s portfolio consisted of five Class A assets comprising 19 buildings and totaling approximately 8.7 million rentable square feet in the Greenway, Galleria and Westchase submarkets of Houston. In addition, the Company operates a fee-based real estate service (the Third-Party Services Business) through a subsidiary, Eola Office Partners, LLC and its subsidiaries (collectively, Eola), which in total managed approximately 3.8 million square feet (unaudited) for primarily third-party owners, as of December 31, 2016. The Company’s properties include CityWestPlace, San Felipe Plaza, Phoenix Tower, Greenway Plaza and Post Oak Central.

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