Stag Industrial (NYSE: STAG) and Duke Realty Corporation (NYSE:DRE) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitabiliy, earnings, analyst recommendations and risk.

Earnings & Valuation

This table compares Stag Industrial and Duke Realty Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stag Industrial $258.85 million 9.46 $179.68 million $0.09 306.59
Duke Realty Corporation $915.50 million 10.79 $510.04 million $0.96 28.93

Duke Realty Corporation has higher revenue and earnings than Stag Industrial. Duke Realty Corporation is trading at a lower price-to-earnings ratio than Stag Industrial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Stag Industrial has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Duke Realty Corporation has a beta of 0.94, meaning that its stock 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 5.1%. Duke Realty Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 2.7%. 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. Duke Realty Corporation pays out 79.2% 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 Duke Realty Corporation has raised its dividend for 2 consecutive years. Stag Industrial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Stag Industrial and Duke Realty Corporation’s 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%
Duke Realty Corporation 37.48% 9.74% 4.91%

Institutional and Insider Ownership

77.4% of Stag Industrial shares are held by institutional investors. Comparatively, 93.0% of Duke Realty Corporation shares are held by institutional investors. 2.0% of Stag Industrial shares are held by company insiders. Comparatively, 0.3% of Duke Realty Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Stag Industrial and Duke Realty Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stag Industrial 0 1 6 0 2.86
Duke Realty Corporation 0 5 7 0 2.58

Stag Industrial presently has a consensus target price of $26.50, indicating a potential downside of 3.95%. Duke Realty Corporation has a consensus target price of $29.20, indicating a potential upside of 5.15%. Given Duke Realty Corporation’s higher probable upside, analysts plainly believe Duke Realty Corporation is more favorable than Stag Industrial.

Summary

Duke Realty Corporation beats Stag Industrial on 12 of the 17 factors compared between the two stocks.

Stag Industrial Company Profile

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.

Duke Realty Corporation Company Profile

Duke Realty Corporation is a self-managed real estate investment trust (REIT). The Company and Duke Realty Limited Partnership collectively specialize in the ownership, management and development of bulk distribution (industrial) and medical office real estate. It operates through three segments, the first two of which consist of the ownership and rental of industrial and medical office real estate investments. The operations of its industrial and medical office properties, as well as its rental operations, are collectively referred to as Rental Operations. The third segment consists of various real estate services, such as property management, asset management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as Service Operations. Its Service Operations segment also includes its taxable REIT subsidiary, through which certain of the segment’s operations are conducted.

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