SL Green Realty Corporation (SLG) versus Corporate Office Properties Trust (OFC) Critical Analysis
SL Green Realty Corporation (NYSE: SLG) and Corporate Office Properties Trust (NYSE:OFC) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitabiliy.
SL Green Realty Corporation pays an annual dividend of $3.10 per share and has a dividend yield of 3.0%. Corporate Office Properties Trust pays an annual dividend of $1.10 per share and has a dividend yield of 3.2%. SL Green Realty Corporation pays out 139.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Corporate Office Properties Trust 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. Corporate Office Properties Trust has increased its dividend for 5 consecutive years. Corporate Office Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
98.6% of Corporate Office Properties Trust shares are held by institutional investors. 3.1% of SL Green Realty Corporation shares are held by company insiders. Comparatively, 0.6% of Corporate Office Properties Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent ratings for SL Green Realty Corporation and Corporate Office Properties Trust, 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|
|Corporate Office Properties Trust||1||7||2||0||2.10|
SL Green Realty Corporation presently has a consensus price target of $114.90, suggesting a potential upside of 11.82%. Corporate Office Properties Trust has a consensus price target of $32.88, suggesting a potential downside of 5.48%. Given SL Green Realty Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe SL Green Realty Corporation is more favorable than Corporate Office Properties Trust.
Volatility and Risk
SL Green Realty Corporation has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Corporate Office Properties Trust has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.
This table compares SL Green Realty Corporation and Corporate Office Properties Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SL Green Realty Corporation||13.33%||2.98%||1.46%|
|Corporate Office Properties Trust||4.56%||1.90%||0.69%|
Valuation and Earnings
This table compares SL Green Realty Corporation and Corporate Office Properties Trust’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SL Green Realty Corporation||$1.66 billion||6.30||$936.45 million||$2.22||46.28|
|Corporate Office Properties Trust||$571.87 million||5.99||$294.74 million||$0.11||316.21|
SL Green Realty Corporation has higher revenue and earnings than Corporate Office Properties Trust. SL Green Realty Corporation is trading at a lower price-to-earnings ratio than Corporate Office Properties Trust, indicating that it is currently the more affordable of the two stocks.
SL Green Realty Corporation beats Corporate Office Properties Trust on 13 of the 17 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.
Corporate Office Properties Trust Company Profile
Corporate Office Properties Trust is a fully-integrated and self-managed real estate investment trust (REIT). The Company owns, manages, leases, develops and acquires office and data center properties. The Company’s segments are Defense/IT Locations; Regional Office; operating wholesale data center, and other. As of December 31, 2016, the Company’s properties included 164 operating office properties totaling 17.2 million square feet, including 13 triple-net leased, single-tenant data center properties; 11 office properties under construction or redevelopment; 1,028 acres of land controlled for future development, and a wholesale data center with a critical load of 19.25 megawatts. The Company conducts all of its operations through Corporate Office Properties, L.P. (COPLP) and subsidiaries (collectively, the Operating Partnership). COPLP owns real estate both directly and through subsidiary partnerships and limited liability companies (LLCs).
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