Critical Comparison: Duke Realty Corporation (DRE) versus EastGroup Properties (EGP)
Duke Realty Corporation (NYSE: DRE) and EastGroup Properties (NYSE:EGP) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.
This table compares Duke Realty Corporation and EastGroup Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Duke Realty Corporation||166.06%||8.72%||4.74%|
Insider and Institutional Ownership
92.5% of Duke Realty Corporation shares are owned by institutional investors. Comparatively, 95.1% of EastGroup Properties shares are owned by institutional investors. 0.3% of Duke Realty Corporation shares are owned by company insiders. Comparatively, 2.9% of EastGroup Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent recommendations and price targets for Duke Realty Corporation and EastGroup Properties, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Duke Realty Corporation||0||5||6||0||2.55|
Duke Realty Corporation presently has a consensus target price of $29.00, indicating a potential upside of 0.62%. EastGroup Properties has a consensus target price of $77.14, indicating a potential downside of 10.51%. Given Duke Realty Corporation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Duke Realty Corporation is more favorable than EastGroup Properties.
Duke Realty Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 2.6%. EastGroup Properties pays an annual dividend of $2.48 per share and has a dividend yield of 2.9%. Duke Realty Corporation pays out 18.9% of its earnings in the form of a dividend. EastGroup Properties pays out 104.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Duke Realty Corporation has raised its dividend for 2 consecutive years and EastGroup Properties has raised its dividend for 5 consecutive years. EastGroup Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Duke Realty Corporation and EastGroup Properties’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Duke Realty Corporation||$970.13 million||10.57||$556.05 million||$4.03||7.15|
|EastGroup Properties||$263.59 million||11.17||$161.56 million||$2.37||36.37|
Duke Realty Corporation has higher revenue and earnings than EastGroup Properties. Duke Realty Corporation is trading at a lower price-to-earnings ratio than EastGroup Properties, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Duke Realty Corporation has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, EastGroup Properties has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.
Duke Realty Corporation beats EastGroup Properties on 9 of the 17 factors compared between the two stocks.
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 includes real estate services, such as property management, asset management, leasing, development, general contracting and construction management. Its Service Operations segment also includes its taxable REIT subsidiary, through which certain of the segment’s operations are conducted. It maintains a Baa1 rating from Moody’s Investor Service, Inc. and a BBB+ rating from Standard & Poor’s Financial Services LLC.
EastGroup Properties Company Profile
EastGroup Properties, Inc. is an equity real estate investment trust (REIT). The Company is focused on the development, acquisition and operation of industrial properties in various Sunbelt markets across the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company holds its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria. The Company may provide financing in connection with such sales of property if market conditions require. In addition, the Company may provide financing to a partner or co-owner in connection with an acquisition of real estate in certain situations. The Company owned 327 industrial properties and one office building as of December 31, 2016. The Company’s properties in North Carolina include Lindbergh Business Park, Nations Ford Business Park and Airport Commerce Center in Charlotte area.
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