DCT Industrial Trust (NYSE: DCT) and Stag Industrial (NYSE:STAG) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Earnings and Valuation

This table compares DCT Industrial Trust and Stag Industrial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DCT Industrial Trust $418.17 million 13.25 $286.65 million $0.99 60.13
Stag Industrial $270.80 million 9.59 $185.80 million $0.28 100.52

DCT Industrial Trust has higher revenue and earnings than Stag Industrial. DCT Industrial Trust 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 & Volatility

DCT Industrial Trust has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Stag Industrial has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Profitability

This table compares DCT Industrial Trust and Stag Industrial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DCT Industrial Trust 22.20% 4.69% 2.43%
Stag Industrial 12.22% 3.97% 1.66%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for DCT Industrial Trust and Stag Industrial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DCT Industrial Trust 0 5 2 0 2.29
Stag Industrial 0 1 6 0 2.86

DCT Industrial Trust presently has a consensus target price of $53.00, indicating a potential downside of 10.97%. Stag Industrial has a consensus target price of $27.58, indicating a potential downside of 2.00%. Given Stag Industrial’s stronger consensus rating and higher probable upside, analysts plainly believe Stag Industrial is more favorable than DCT Industrial Trust.

Dividends

DCT Industrial Trust pays an annual dividend of $1.24 per share and has a dividend yield of 2.1%. Stag Industrial pays an annual dividend of $1.41 per share and has a dividend yield of 5.0%. DCT Industrial Trust pays out 125.3% 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 pays out 503.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DCT Industrial Trust has raised its dividend for 2 consecutive years and Stag Industrial has raised its dividend for 6 consecutive years. Stag Industrial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

95.4% of DCT Industrial Trust shares are held by institutional investors. Comparatively, 81.3% of Stag Industrial shares are held by institutional investors. 1.5% of DCT Industrial Trust shares are held by company insiders. Comparatively, 2.0% of Stag Industrial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

DCT Industrial Trust beats Stag Industrial on 9 of the 17 factors compared between the two stocks.

About DCT Industrial Trust

DCT Industrial Trust Inc. (DCT) is an industrial real estate company. The Company specializes in the ownership, acquisition, development, leasing and management of bulk-distribution and light-industrial properties located in various distribution markets in the United States. The Company operates through three segments: East, Central and West. As of December 31, 2016, the Company owned interests in approximately 74.0 million square feet of properties leased to various customers, including 64.7 million square feet consisting of 401 consolidated operating properties that were 97.2% occupied; 7.8 million square feet consisting of 23 unconsolidated properties that were 97.8% occupied; 0.3 million square feet consisting of three consolidated properties under redevelopment, and 1.2 million square feet consisting of four consolidated properties. As of December 31, 2016, the Company’s total consolidated portfolio consisted of 408 properties with an average size of 162,000 square feet.

About Stag Industrial

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.

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