Piedmont Office Realty Trust (PDM) versus Equity Commonwealth (EQC) Financial Analysis
Piedmont Office Realty Trust (NYSE: PDM) and Equity Commonwealth (NYSE:EQC) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.
Earnings and Valuation
This table compares Piedmont Office Realty Trust and Equity Commonwealth’s gross 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||5.00||$263.29 million||$0.38||52.48|
|Equity Commonwealth||$409.33 million||9.18||$194.30 million||$0.86||35.22|
Piedmont Office Realty Trust has higher revenue and earnings than Equity Commonwealth. Equity Commonwealth is trading at a lower price-to-earnings ratio than Piedmont Office Realty Trust, indicating that it is currently the more affordable of the two stocks.
This table compares Piedmont Office Realty Trust and Equity Commonwealth’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%|
Insider & Institutional Ownership
82.8% of Piedmont Office Realty Trust shares are held by institutional investors. Comparatively, 94.5% of Equity Commonwealth shares are held by institutional investors. 0.8% of Piedmont Office Realty Trust shares are held by insiders. Comparatively, 1.0% of Equity Commonwealth shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
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, Equity Commonwealth has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.
Piedmont Office Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 4.2%. Equity Commonwealth does not pay a dividend. 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. Piedmont Office Realty Trust has increased its dividend for 3 consecutive years.
This is a summary of current recommendations and price targets for Piedmont Office Realty Trust and Equity Commonwealth, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Piedmont Office Realty Trust||0||1||1||0||2.50|
Piedmont Office Realty Trust presently has a consensus price target of $22.25, suggesting a potential upside of 11.58%. Equity Commonwealth has a consensus price target of $32.00, suggesting a potential upside of 5.65%. Given Piedmont Office Realty Trust’s stronger consensus rating and higher possible upside, research analysts plainly believe Piedmont Office Realty Trust is more favorable than Equity Commonwealth.
Equity Commonwealth beats Piedmont Office Realty Trust on 9 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 Equity Commonwealth
Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of August 14, 2017, the Company’s portfolio included 20 properties and 11 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.
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