Douglas Emmett (NYSE: DEI) and Alexandria Real Estate Equities (NYSE:ARE) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.
Earnings and Valuation
This table compares Douglas Emmett and Alexandria Real Estate Equities’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Douglas Emmett||$788.75 million||8.34||$481.47 million||$0.59||68.42|
|Alexandria Real Estate Equities||$1.02 billion||11.25||$639.55 million||$0.40||306.28|
This table compares Douglas Emmett and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alexandria Real Estate Equities||9.45%||3.11%||1.49%|
Douglas Emmett pays an annual dividend of $0.92 per share and has a dividend yield of 2.3%. Alexandria Real Estate Equities pays an annual dividend of $3.44 per share and has a dividend yield of 2.8%. Douglas Emmett pays out 155.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities pays out 860.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett has raised its dividend for 6 consecutive years and Alexandria Real Estate Equities has raised its dividend for 6 consecutive years.
Volatility and Risk
Douglas Emmett has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.
Insider and Institutional Ownership
96.2% of Douglas Emmett shares are held by institutional investors. 17.8% of Douglas Emmett shares are held by company insiders. Comparatively, 1.6% of Alexandria Real Estate Equities shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Douglas Emmett and Alexandria Real Estate Equities, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alexandria Real Estate Equities||0||0||3||0||3.00|
Douglas Emmett presently has a consensus target price of $39.71, indicating a potential downside of 1.62%. Alexandria Real Estate Equities has a consensus target price of $126.00, indicating a potential upside of 2.85%. Given Alexandria Real Estate Equities’ stronger consensus rating and higher possible upside, analysts clearly believe Alexandria Real Estate Equities is more favorable than Douglas Emmett.
Alexandria Real Estate Equities beats Douglas Emmett on 10 of the 16 factors compared between the two stocks.
About Douglas Emmett
Douglas Emmett, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is owner and operator of office and multifamily properties located in submarkets in Los Angeles and Honolulu. The Company operates through two segments: the acquisition, development, ownership and management of office real estate (Office Segment), and the acquisition, development, ownership and management of multifamily real estate (Multifamily Segment). The services for its Office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for its Multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. It focuses on owning, acquiring developing and managing a substantial share of office properties and multifamily communities in neighborhoods.
About Alexandria Real Estate Equities
Alexandria Real Estate Equities, Inc. is a real estate investment (REIT). The Company is engaged in the business of providing space for lease to the life science and technology industries. It focuses on collaborative life science and technology campuses. It develops urban cluster campuses and ecosystems. As of December 31, 2016, the Company had 199 properties in North America. As of December 31, 2016, its asset base in North America consisted of 25.2 million square feet, including 19.9 million rentable square feet/foot (RSF) of operating properties, and development and redevelopment of under construction or pre-construction, as well as 5.3 million square feet of future ground-up development projects. Its properties are located in various areas, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle Park. Its properties include Alexandria Technology Square, Alexandria Park at 128 and Alexandria Technology Center-Gateway.
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