Piedmont Office Realty Trust (NYSE: PDM) is one of 20 publicly-traded companies in the “Office REITs” industry, but how does it contrast to its peers? We will compare Piedmont Office Realty Trust to related businesses based on the strength of its dividends, institutional ownership, valuation, profitability, risk, earnings and analyst recommendations.

Risk & Volatility

Piedmont Office Realty Trust has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Piedmont Office Realty Trust’s peers have a beta of 0.91, meaning that their average share price is 9% less volatile than the S&P 500.

Insider & Institutional Ownership

82.8% of Piedmont Office Realty Trust shares are held by institutional investors. Comparatively, 85.9% of shares of all “Office REITs” companies are held by institutional investors. 0.8% of Piedmont Office Realty Trust shares are held by insiders. Comparatively, 3.2% of shares of all “Office REITs” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Piedmont Office Realty Trust and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piedmont Office Realty Trust 9.71% 2.67% 1.29%
Piedmont Office Realty Trust Competitors 5.41% 1.37% 0.69%

Dividends

Piedmont Office Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 4.1%. 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. As a group, “Office REITs” companies pay a dividend yield of 3.4% and pay out 249.2% of their earnings in the form of a dividend. Piedmont Office Realty Trust has raised its dividend for 3 consecutive years. Piedmont Office Realty Trust is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and price targets for Piedmont Office Realty Trust and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piedmont Office Realty Trust 0 1 1 0 2.50
Piedmont Office Realty Trust Competitors 173 633 610 10 2.32

Piedmont Office Realty Trust presently has a consensus price target of $22.25, indicating a potential upside of 9.44%. As a group, “Office REITs” companies have a potential upside of 9.57%. Given Piedmont Office Realty Trust’s peers higher possible upside, analysts clearly believe Piedmont Office Realty Trust has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares Piedmont Office Realty Trust and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Piedmont Office Realty Trust $579.79 million $263.29 million 53.50
Piedmont Office Realty Trust Competitors $648.15 million $343.67 million 59.12

Piedmont Office Realty Trust’s peers have higher revenue and earnings than Piedmont Office Realty Trust. Piedmont Office Realty Trust is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Piedmont Office Realty Trust peers beat Piedmont Office Realty Trust on 8 of the 15 factors compared.

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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