TIER REIT (OTCMKTS: TIER) and City Office REIT (NYSE:CIO) are both small-cap financials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitabiliy, valuation and risk.

Dividends

City Office REIT pays an annual dividend of $0.94 per share and has a dividend yield of 7.5%. TIER REIT does not pay 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.

Institutional & Insider Ownership

51.2% of City Office REIT shares are held by institutional investors. 3.2% of City Office REIT shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for TIER REIT and City Office REIT, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TIER REIT 0 0 2 0 3.00
City Office REIT 0 1 5 0 2.83

TIER REIT currently has a consensus target price of $20.50, suggesting a potential upside of 10.99%. City Office REIT has a consensus target price of $14.80, suggesting a potential upside of 17.37%. Given City Office REIT’s higher possible upside, analysts plainly believe City Office REIT is more favorable than TIER REIT.

Profitability

This table compares TIER REIT and City Office REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TIER REIT 174.73% 59.24% 25.37%
City Office REIT 5.90% 2.90% 0.81%

Earnings & Valuation

This table compares TIER REIT and City Office REIT’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TIER REIT $230.70 million 3.83 $101.24 million N/A N/A
City Office REIT $81.59 million 4.68 $42.68 million $0.08 157.63

TIER REIT has higher revenue and earnings than City Office REIT.

About TIER REIT

TIER REIT, Inc. is a real estate investment trust. The Company’s business consists of owning, acquiring, developing, operating, investing in, and disposing of real estate assets. The Company’s business is conducted through Tier Operating Partnership LP (Tier OP). As of December 31, 2016, the Company owned interests in 29 operating office properties, one non-operating property and one development property located in 13 markets throughout the United States. It owns properties located in metropolitan cities and suburban markets in the United States. The Company’s office properties include The Terrace Office Park, Domain 3, Domain 4, 5950 Sherry Lane, Burnett Plaza, Loop Central, One BriarLake Plaza, Three Eldridge Place, Eisenhower I, Forum Office Park, 500 E. Pratt, Woodcrest Corporate Center and 111 Woodcrest. The Company’s properties are located in Austin, Dallas, Houston, Charlotte, Nashville, Atlanta and Denver.

About City Office REIT

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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