Critical Contrast: Equity Commonwealth (EQC) versus Boston Properties (BXP)
Equity Commonwealth (NYSE: EQC) and Boston Properties (NYSE:BXP) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.
Boston Properties pays an annual dividend of $3.00 per share and has a dividend yield of 2.5%. Equity Commonwealth does not pay a dividend. Boston Properties pays out 102.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility & Risk
Equity Commonwealth has a beta of 0.08, meaning that its stock price is 92% less volatile than the S&P 500. Comparatively, Boston Properties has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.
Institutional and Insider Ownership
93.4% of Equity Commonwealth shares are owned by institutional investors. Comparatively, 93.8% of Boston Properties shares are owned by institutional investors. 1.0% of Equity Commonwealth shares are owned by company insiders. Comparatively, 0.9% of Boston Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of current ratings for Equity Commonwealth and Boston Properties, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Equity Commonwealth presently has a consensus target price of $32.00, indicating a potential upside of 4.71%. Boston Properties has a consensus target price of $135.64, indicating a potential upside of 11.15%. Given Boston Properties’ stronger consensus rating and higher probable upside, analysts plainly believe Boston Properties is more favorable than Equity Commonwealth.
Earnings and Valuation
This table compares Equity Commonwealth and Boston Properties’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Equity Commonwealth||$409.33 million||9.26||$194.30 million||$0.86||35.53|
|Boston Properties||$2.57 billion||7.33||$1.51 billion||$2.94||41.51|
Boston Properties has higher revenue and earnings than Equity Commonwealth. Equity Commonwealth is trading at a lower price-to-earnings ratio than Boston Properties, indicating that it is currently the more affordable of the two stocks.
This table compares Equity Commonwealth and Boston Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Boston Properties beats Equity Commonwealth on 11 of the 16 factors compared between the two stocks.
About Equity Commonwealth
Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of December 31, 2016, the Company’s portfolio included 33 properties, one land parcel and one property taken out of a service, classified as a land parcel, with a combined 16.1 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.
About Boston Properties
Boston Properties, Inc. is a real estate investment trust. The Company is an owner and developer of office properties in the United States. Its segments by geographic area are Boston, New York, San Francisco and Washington, DC. Its segments by property type include Office, Residential and Hotel. As of December 31, 2016, the Company owned or had interests in 174 commercial real estate properties, aggregating approximately 47.7 million net rentable square feet of primarily Class A office properties, including eight properties under construction/redevelopment totaling approximately 4.0 million net rentable square feet. As of December 31, 2016, its properties consisted of 164 Office properties (including six properties under construction/redevelopment); one hotel; five retail properties, and four residential properties (including two under construction). Its tenant base includes sectors, such as media technology, legal services, government/public administration and retail.
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