City Office REIT (NYSE:CIO) and Paramount Group (PGRE) Critical Contrast
Paramount Group (NYSE: PGRE) and City Office REIT (NYSE:CIO) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitabiliy, risk, valuation and analyst recommendations.
This is a breakdown of current recommendations for Paramount Group and City Office REIT, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|City Office REIT||0||1||5||0||2.83|
Paramount Group presently has a consensus price target of $15.50, suggesting a potential upside of 1.77%. City Office REIT has a consensus price target of $14.80, suggesting a potential upside of 19.94%. Given City Office REIT’s stronger consensus rating and higher possible upside, analysts plainly believe City Office REIT is more favorable than Paramount Group.
Volatility and Risk
Paramount Group has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, City Office REIT has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500.
This table compares Paramount Group and City Office REIT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|City Office REIT||5.90%||2.90%||0.81%|
Paramount Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.5%. City Office REIT pays an annual dividend of $0.94 per share and has a dividend yield of 7.6%. Paramount Group pays out -1,900.0% of its earnings in the form of a dividend. City Office REIT pays out 1,175.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation and Earnings
This table compares Paramount Group and City Office REIT’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Paramount Group||$693.51 million||5.08||$373.80 million||($0.02)||-761.50|
|City Office REIT||$81.59 million||4.58||$42.68 million||$0.08||154.25|
Paramount Group has higher revenue and earnings than City Office REIT. Paramount Group is trading at a lower price-to-earnings ratio than City Office REIT, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
66.7% of Paramount Group shares are held by institutional investors. Comparatively, 51.2% of City Office REIT shares are held by institutional investors. 5.7% of Paramount Group shares are held by insiders. Comparatively, 3.2% of City Office REIT shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
City Office REIT beats Paramount Group on 8 of the 15 factors compared between the two stocks.
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.
City Office REIT Company Profile
City Office REIT, Inc. is a real estate investment trust. The Company is focused on acquiring, owning and operating office properties located primarily in metropolitan areas in the Southern and Western United States. It conducts its operations primarily through City Office REIT Operating Partnership, L.P. (the Operating Partnership). As of December 31, 2016, it owned 18 office complexes consisting of 37 office buildings with a total of approximately 4.4 million square feet of net rentable area (NRA) in the metropolitan areas of Boise, Dallas, Denver, Orlando, Phoenix, Portland and Tampa. Its properties include Park Tower, City Center, Intellicenter and Carillon Point in Tampa, Florida; Cherry Creek, Plaza 25, DTC Crossroads, Superior Pointe and Logan Tower in Denver, Colorado; Washington Group Plaza in Boise, Idaho; FRP Collection, Central Fairwinds and FRP Ingenuity Drive in Orlando, Florida; 190 Office Center and Lake Vista Pointe in Dallas, Texas, and SanTan in Phoenix, Arizona.
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