Head to Head Analysis: NorthStar Realty Europe Corp. (NRE) and Piedmont Office Realty Trust (PDM)
NorthStar Realty Europe Corp. (NYSE: NRE) and Piedmont Office Realty Trust (NYSE:PDM) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.
This is a breakdown of current recommendations for NorthStar Realty Europe Corp. and Piedmont Office Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NorthStar Realty Europe Corp.||0||0||0||0||N/A|
|Piedmont Office Realty Trust||0||1||1||0||2.50|
Piedmont Office Realty Trust has a consensus target price of $22.25, indicating a potential upside of 10.64%. Given Piedmont Office Realty Trust’s higher probable upside, analysts clearly believe Piedmont Office Realty Trust is more favorable than NorthStar Realty Europe Corp..
Risk & Volatility
NorthStar Realty Europe Corp. has a beta of 2.5, indicating that its stock price is 150% more volatile than the S&P 500. Comparatively, Piedmont Office Realty Trust has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.
Insider & Institutional Ownership
70.0% of NorthStar Realty Europe Corp. shares are held by institutional investors. Comparatively, 82.8% of Piedmont Office Realty Trust shares are held by institutional investors. 2.2% of NorthStar Realty Europe Corp. shares are held by insiders. Comparatively, 0.8% of Piedmont Office Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.9%. Piedmont Office Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 4.2%. NorthStar Realty Europe Corp. pays out -133.3% of its earnings in the form of a dividend. Piedmont Office Realty Trust pays out 221.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Piedmont Office Realty Trust has raised its dividend for 3 consecutive years. NorthStar Realty Europe Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares NorthStar Realty Europe Corp. and Piedmont Office Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NorthStar Realty Europe Corp.||-18.57%||7.73%||2.46%|
|Piedmont Office Realty Trust||9.71%||2.67%||1.29%|
Valuation & Earnings
This table compares NorthStar Realty Europe Corp. and Piedmont Office Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NorthStar Realty Europe Corp.||$131.25 million||5.16||$37.01 million||($0.45)||-27.24|
|Piedmont Office Realty Trust||$579.79 million||5.05||$263.29 million||$0.38||52.92|
Piedmont Office Realty Trust has higher revenue and earnings than NorthStar Realty Europe Corp.. NorthStar Realty Europe Corp. is trading at a lower price-to-earnings ratio than Piedmont Office Realty Trust, indicating that it is currently the more affordable of the two stocks.
Piedmont Office Realty Trust beats NorthStar Realty Europe Corp. on 8 of the 15 factors compared between the two stocks.
NorthStar Realty Europe Corp. Company Profile
NorthStar Realty Europe Corp. is a real estate investment trust (REIT). The Company is a European focused commercial real estate company with primary office properties in cities within Germany, the United Kingdom and France. Its objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time. The Company conducts its business through two segments: Real Estate and Corporate. Its European commercial real estate business is primarily focused on office properties. Its portfolio consists of approximately 48 properties and a total of approximately 495,588 square meters of rentable space, located in various European markets, including Frankfurt, Hamburg, Berlin, London, Paris, Amsterdam, Milan, Brussels and Madrid. Its overall portfolio is over 87% occupied. In addition, it owns over two hotels, which are leased to third-party operators. It is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NSAM).
Piedmont Office Realty Trust Company Profile
Piedmont Office Realty Trust, Inc. is an integrated self-managed real estate investment trust (REIT). The Company’s business consists primarily of owning, managing, operating, leasing, acquiring, developing, investing in, and disposing of office real estate assets. As of December 31, 2016, the Company owned and operated 65 in-service office properties, one redevelopment asset, two development assets and one office building through an unconsolidated joint venture. Its properties are located in areas, including New York, Chicago, Atlanta, Dallas, Boston, Minneapolis and Orlando. Its tenant base includes industries, such as business services, depository institutions, educational services, real estate, legal services and insurance carriers. The Company conducts business primarily through Piedmont Operating Partnership, L.P. (Piedmont OP). It performs the management of its buildings through its subsidiaries, including Piedmont Government Services, LLC and Piedmont Office Management, LLC.
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