PS Business Parks (PSB) versus Select Income REIT (SIR) Head-To-Head Contrast
Select Income REIT (NASDAQ: SIR) and PS Business Parks (NYSE:PSB) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, earnings and profitability.
Select Income REIT pays an annual dividend of $2.04 per share and has a dividend yield of 8.8%. PS Business Parks pays an annual dividend of $3.40 per share and has a dividend yield of 2.5%. Select Income REIT pays out 210.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Select Income REIT has raised its dividend for 3 consecutive years. Select Income REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Select Income REIT and PS Business Parks’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Select Income REIT||N/A||N/A||N/A||$0.97||24.03|
|PS Business Parks||$394.93 million||9.26||$261.16 million||$3.06||43.94|
PS Business Parks has higher revenue and earnings than Select Income REIT. Select Income REIT is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Select Income REIT and PS Business Parks, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Select Income REIT||0||0||1||0||3.00|
|PS Business Parks||1||1||0||0||1.50|
Select Income REIT presently has a consensus price target of $34.00, suggesting a potential upside of 45.86%. PS Business Parks has a consensus price target of $107.00, suggesting a potential downside of 20.42%. Given Select Income REIT’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Select Income REIT is more favorable than PS Business Parks.
Risk & Volatility
Select Income REIT has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.
This table compares Select Income REIT and PS Business Parks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Select Income REIT||18.65%||4.18%||1.85%|
|PS Business Parks||39.05%||16.50%||7.61%|
Institutional and Insider Ownership
48.2% of Select Income REIT shares are held by institutional investors. Comparatively, 72.3% of PS Business Parks shares are held by institutional investors. 2.0% of Select Income REIT shares are held by insiders. Comparatively, 1.6% of PS Business Parks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Select Income REIT Company Profile
Select Income REIT is a real estate investment trust. The Company is engaged in the ownership of properties that include buildings and leased industrial lands that are primarily net leased to single tenants. As of December 31, 2016, the Company owned 121 properties (362 buildings, leasable land parcels and easements) with approximately 44.8 million rentable square feet. As of December 31, 2016, the Company’s properties consisted of 110 office and industrial properties (133 buildings) with approximately 27.0 million square feet located in 34 states throughout the mainland United States (Mainland Properties), and 11 properties (229 buildings, leasable land parcels and easements) located on the island of Oahu, Hawaii, with approximately 17.8 million rentable square feet that are primarily leased to industrial and commercial tenants (Hawaii Properties). As of December 31, 2016, the Company’s properties were leased to 312 different tenants.
PS Business Parks Company Profile
PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust (REIT). The Company owns, operates and develops commercial properties, primarily multi-tenant flex, office and industrial parks. It focuses on owning concentrated business parks. PS Business Parks, L.P. (the Operating Partnership) is a California limited partnership, which owns directly or indirectly substantially all of its assets and through, which the Company conducts substantially all of its business. PSB is the partner of the Operating Partnership and, as of December 31, 2016, owned 77.9% of the common partnership units. The remaining common partnership units are owned by Public Storage (PS). As of December 31, 2016, the Company owned and operated 28.1 million rentable square feet of commercial space, comprising 99 business parks, in the states, including California, Texas, Virginia, Florida, Maryland and Washington. It also manages 684,000 rentable square feet on behalf of PS.
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