Analyzing SL Green Realty Corporation (SLG) and Paramount Group (PGRE)

SL Green Realty Corporation (NYSE: SLG) and Paramount Group (NASDAQ:PGRE) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares SL Green Realty Corporation and Paramount Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SL Green Realty Corporation $1.53 billion 6.36 $833.52 million $0.97 102.06
Paramount Group $698.58 million 5.18 $384.89 million N/A N/A

SL Green Realty Corporation has higher revenue and earnings than Paramount Group.

Profitability

This table compares SL Green Realty Corporation and Paramount Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SL Green Realty Corporation 7.20% 1.43% 0.72%
Paramount Group 0.90% 0.04% 0.07%

Analyst Recommendations

This is a summary of current ratings and target prices for SL Green Realty Corporation and Paramount Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SL Green Realty Corporation 0 7 6 0 2.46
Paramount Group 3 1 3 0 2.00

SL Green Realty Corporation presently has a consensus target price of $117.18, indicating a potential upside of 18.37%. Paramount Group has a consensus target price of $16.10, indicating a potential upside of 3.01%. Given SL Green Realty Corporation’s stronger consensus rating and higher probable upside, research analysts clearly believe SL Green Realty Corporation is more favorable than Paramount Group.

Dividends

SL Green Realty Corporation pays an annual dividend of $3.10 per share and has a dividend yield of 3.1%. Paramount Group does not pay a dividend. SL Green Realty Corporation pays out 319.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Paramount Group has raised its dividend for 5 consecutive years.

Summary

SL Green Realty Corporation beats Paramount Group on 10 of the 13 factors compared between the two stocks.

SL Green Realty Corporation Company Profile

SL Green Realty Corp. is a self-managed real estate investment trust (REIT), with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction and leasing. The Company operates through two segments: real estate, and debt and preferred equity investments. It acquires, owns, repositions, manages and leases commercial office, retail and multifamily properties in the New York Metropolitan area. Its debt and preferred equity activities include purchases and originations, inclusive of advances under future funding obligations, discount and fee amortization, and paid-in-kind interest. As of December 31, 2016, the Company owned or held interests in 24 consolidated commercial office buildings encompassing approximately 16.1 million rentable square feet and seven unconsolidated commercial office buildings encompassing approximately 6.6 million rentable square feet located primarily in midtown Manhattan.

Paramount Group Company Profile

Paramount Group, Inc. is a fully-integrated real estate investment trust (REIT) focused on owning, operating, managing, acquiring and redeveloping Class A office properties in select central business district submarkets of New York City, Washington, District of Columbia (D.C.) and San Francisco. The Company conducts its business through, and substantially all its interests in properties and investments are held by, Paramount Group Operating Partnership LP (the Operating Partnership). The Company’s segments include New York, Washington, D.C. and San Francisco. As of December 31, 2016, the Company’s portfolio consisted of 13 Class A office properties aggregating approximately 10.8 million square feet that was 93.3% leased and 90.9% occupied. The Company also has an investment management business, where it serves as the general partner and property manager of certain private equity real estate funds for institutional investors and high-net-worth individuals.

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