Contrasting Gramercy Property Trust (GPT) and Paramount Group (PGRE)
Gramercy Property Trust (NYSE: GPT) and Paramount Group (NYSE:PGRE) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.
Valuation and Earnings
This table compares Gramercy Property Trust and Paramount Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Gramercy Property Trust||$525.64 million||8.52||$368.69 million||$0.09||327.48|
|Paramount Group||$698.58 million||5.43||$384.89 million||$0.41||38.78|
Paramount Group has higher revenue and earnings than Gramercy Property Trust. Paramount Group is trading at a lower price-to-earnings ratio than Gramercy Property Trust, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Gramercy Property Trust has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Paramount Group has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.
This is a summary of current ratings and target prices for Gramercy Property Trust and Paramount Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gramercy Property Trust||0||2||2||0||2.50|
Gramercy Property Trust currently has a consensus price target of $34.00, indicating a potential upside of 15.37%. Paramount Group has a consensus price target of $15.50, indicating a potential downside of 2.52%. Given Gramercy Property Trust’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Gramercy Property Trust is more favorable than Paramount Group.
Insider & Institutional Ownership
87.0% of Gramercy Property Trust shares are held by institutional investors. Comparatively, 65.0% of Paramount Group shares are held by institutional investors. 1.4% of Gramercy Property Trust shares are held by insiders. Comparatively, 5.7% of Paramount Group shares are held by 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.
This table compares Gramercy Property Trust and Paramount Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gramercy Property Trust||4.35%||0.81%||0.40%|
Gramercy Property Trust pays an annual dividend of $1.50 per share and has a dividend yield of 5.1%. Paramount Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.4%. Gramercy Property Trust pays out 1,666.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Paramount Group pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gramercy Property Trust has raised its dividend for 2 consecutive years. Gramercy Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Paramount Group beats Gramercy Property Trust on 10 of the 17 factors compared between the two stocks.
Gramercy Property Trust Company Profile
Gramercy Property Trust is a real estate investment trust (REIT), which is an investor and asset manager of commercial real estate. The Company’s operating segments include Investments/Corporate and Asset Management. The Investments/Corporate segment includes all of its activities related to the investment and ownership of commercial properties located throughout the United States and Europe. The Asset Management segment includes substantially all of its activities related to asset and property management of commercial properties located throughout the United States and Europe. It is engaged in acquiring and managing single-tenant, net leased industrial, office and specialty properties. It focuses on income producing properties leased to tenants in markets in the United States and Europe. It earns revenues through rental revenues on properties that it owns in the United States and asset management revenues on properties owned by third parties in the United States and Europe.
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.
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