Critical Review: ProLogis (NYSE:PLD) & Stag Industrial (STAG)
ProLogis (NYSE: PLD) and Stag Industrial (NYSE:STAG) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitabiliy, dividends, institutional ownership, valuation, analyst recommendations and earnings.
This table compares ProLogis and Stag Industrial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares ProLogis and Stag Industrial’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ProLogis||$2.75 billion||11.05||$1.81 billion||$2.24||25.57|
|Stag Industrial||$258.85 million||9.19||$179.68 million||$0.09||297.81|
ProLogis has higher revenue and earnings than Stag Industrial. ProLogis is trading at a lower price-to-earnings ratio than Stag Industrial, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
95.5% of ProLogis shares are owned by institutional investors. Comparatively, 77.2% of Stag Industrial shares are owned by institutional investors. 1.3% of ProLogis shares are owned by company insiders. Comparatively, 2.0% of Stag Industrial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
ProLogis pays an annual dividend of $1.76 per share and has a dividend yield of 3.1%. Stag Industrial pays an annual dividend of $1.40 per share and has a dividend yield of 5.2%. ProLogis pays out 78.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stag Industrial pays out 1,555.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ProLogis has raised its dividend for 3 consecutive years and Stag Industrial has raised its dividend for 6 consecutive years. Stag Industrial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent recommendations and price targets for ProLogis and Stag Industrial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ProLogis presently has a consensus target price of $57.00, suggesting a potential downside of 0.49%. Stag Industrial has a consensus target price of $26.50, suggesting a potential downside of 1.12%. Given ProLogis’ higher probable upside, equities research analysts clearly believe ProLogis is more favorable than Stag Industrial.
Volatility and Risk
ProLogis has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Stag Industrial has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.
ProLogis beats Stag Industrial on 11 of the 17 factors compared between the two stocks.
Prologis, Inc. is a real estate investment trust (REIT) company. The Company is engaged in logistics real estate business. The Company’s segments include Real Estate Operations and Strategic Capital. The Real estate operations segment consists of rental operations and development. The Company’s strategic capital segment includes asset management services, as well as services performed for unconsolidated co-investment ventures. Its strategic capital segment gives the Company access to third-party capital, both private and public. As of December 31, 2016, the Company owned or had investments in, on an owned basis or through co-investment ventures, properties and development projects across 676 million square feet (63 million square meters) in 20 countries spanning four continents.
About Stag Industrial
STAG Industrial, Inc. is a real estate investment trust. The Company is focused on the acquisition, ownership, and operation of single-tenant, industrial properties across the United States. As of December 31, 2016, the Company owned 314 buildings in 37 states with approximately 60.9 million rentable square feet, consisting of 243 warehouse/distribution buildings, 54 light manufacturing buildings, 16 flex/office buildings, and one building in redevelopment. The Company owns all of its properties and conducts its business primarily through STAG Industrial Operating Partnership, L.P. (Operating Partnership). The Company invests in properties historically used for industrial, light manufacturing and commercial purposes. As of December 31, 2016, the Company’s properties were in various locations, such as Montgomery, Alabama; Rogers, Arkansas; Phoenix, Arizona; Sparks, Maryland; Camarillo, California, and Golden and Grand Junction in Colorado.
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