Stag Industrial (NYSE: STAG) and ProLogis (NYSE:PLD) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitabiliy, institutional ownership, earnings, dividends and analyst recommendations.

Risk and Volatility

Stag Industrial has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500. Comparatively, ProLogis has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Dividends

Stag Industrial pays an annual dividend of $1.40 per share and has a dividend yield of 5.0%. ProLogis pays an annual dividend of $1.76 per share and has a dividend yield of 2.9%. 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 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 has raised its dividend for 6 consecutive years and ProLogis has raised its dividend for 3 consecutive years. Stag Industrial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

77.4% of Stag Industrial shares are held by institutional investors. Comparatively, 95.6% of ProLogis shares are held by institutional investors. 2.0% of Stag Industrial shares are held by company insiders. Comparatively, 1.3% of ProLogis shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Stag Industrial and ProLogis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stag Industrial 8.48% 3.21% 1.24%
ProLogis 47.15% 6.66% 3.96%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Stag Industrial and ProLogis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stag Industrial 0 1 6 0 2.86
ProLogis 0 5 11 0 2.69

Stag Industrial currently has a consensus target price of $26.50, indicating a potential downside of 4.81%. ProLogis has a consensus target price of $57.00, indicating a potential downside of 5.19%. Given Stag Industrial’s stronger consensus rating and higher possible upside, research analysts plainly believe Stag Industrial is more favorable than ProLogis.

Earnings & Valuation

This table compares Stag Industrial and ProLogis’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stag Industrial $258.85 million 9.54 $179.68 million $0.09 309.37
ProLogis $2.75 billion 11.59 $1.81 billion $2.24 26.84

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.

Summary

ProLogis beats Stag Industrial on 10 of the 17 factors compared between the two stocks.

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.

About ProLogis

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.

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