Easterly Government Properties (NYSE: DEA) and VEREIT (NYSE:VER) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.
This is a breakdown of recent ratings for Easterly Government Properties and VEREIT, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Easterly Government Properties||0||1||1||0||2.50|
Easterly Government Properties currently has a consensus target price of $22.25, indicating a potential upside of 9.02%. VEREIT has a consensus target price of $10.00, indicating a potential upside of 26.26%. Given VEREIT’s higher probable upside, analysts plainly believe VEREIT is more favorable than Easterly Government Properties.
Earnings and Valuation
This table compares Easterly Government Properties and VEREIT’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Easterly Government Properties||$104.62 million||7.59||$3.41 million||$0.10||204.12|
|VEREIT||$1.45 billion||5.30||-$195.86 million||($0.11)||-71.99|
Easterly Government Properties has higher revenue, but lower earnings than VEREIT. VEREIT is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
96.3% of Easterly Government Properties shares are owned by institutional investors. Comparatively, 85.8% of VEREIT shares are owned by institutional investors. 15.6% of Easterly Government Properties shares are owned by company insiders. Comparatively, 0.1% of VEREIT shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Easterly Government Properties pays an annual dividend of $1.00 per share and has a dividend yield of 4.9%. VEREIT pays an annual dividend of $0.55 per share and has a dividend yield of 6.9%. Easterly Government Properties pays out 1,000.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. VEREIT pays out -500.0% of its earnings in the form of a dividend. VEREIT is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Easterly Government Properties has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500. Comparatively, VEREIT has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
This table compares Easterly Government Properties and VEREIT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Easterly Government Properties||3.40%||0.58%||0.36%|
Easterly Government Properties beats VEREIT on 10 of the 16 factors compared between the two stocks.
About Easterly Government Properties
Easterly Government Properties, Inc. is an internally managed real estate investment trust (REIT). The Company focuses on the acquisition, development and management of Class A commercial properties that are leased to the United States Government agencies. The Company leases its properties to such agencies through the United States General Services Administration (GSA). The operations of the Company are carried on primarily through Easterly Government Properties, LP and the subsidiaries of the Operating Partnership. As of December 31, 2016, it had 43 operating properties in the United States, including 40 operating properties that are leased primarily to the United States Government tenant agencies and three operating properties that are entirely leased to private tenants, encompassing approximately 3.1 million square feet in the aggregate. In addition, the Company had one property under development encompassing approximately 0.1 million square feet as of December 31, 2016.
VEREIT, Inc. is a full-service real estate operating company. The Company operates through two business segments: real estate investment (REI) segment and investment management segment, Cole Capital. As of December 31, 2016, through its REI segment, the Company owned and managed a portfolio of 4,142 retail, restaurant, office and industrial real estate properties with an aggregate of 93.3 million square feet, which are located in 49 states, Puerto Rico and Canada. Through its Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of certain non-listed real estate investment trusts (the Cole REITs) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include over four publicly registered, non-traded REITs.
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