Critical Survey: Parkway Properties (PKY) and NorthStar Realty Europe Corp. (NRE)
Parkway Properties (NYSE: PKY) and NorthStar Realty Europe Corp. (NYSE:NRE) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
This table compares Parkway Properties and NorthStar Realty Europe Corp.’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%|
Parkway Properties pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.6%. NorthStar Realty Europe Corp. pays out -133.3% of its earnings in the form of a dividend.
Risk and Volatility
Parkway Properties has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, NorthStar Realty Europe Corp. has a beta of 2.49, indicating that its stock price is 149% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for Parkway Properties and NorthStar Realty Europe Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NorthStar Realty Europe Corp.||0||0||1||0||3.00|
Parkway Properties presently has a consensus price target of $21.60, suggesting a potential downside of 6.21%. NorthStar Realty Europe Corp. has a consensus price target of $16.50, suggesting a potential upside of 26.15%. Given NorthStar Realty Europe Corp.’s stronger consensus rating and higher possible upside, analysts clearly believe NorthStar Realty Europe Corp. is more favorable than Parkway Properties.
Institutional and Insider Ownership
97.1% of Parkway Properties shares are held by institutional investors. Comparatively, 69.9% of NorthStar Realty Europe Corp. shares are held by institutional investors. 4.9% of Parkway Properties shares are held by company insiders. Comparatively, 2.2% of NorthStar Realty Europe Corp. shares are held by company 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.
Earnings and Valuation
This table compares Parkway Properties and NorthStar Realty Europe Corp.’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Parkway Properties||$182.22 million||6.33||$54.29 million||N/A||N/A|
|NorthStar Realty Europe Corp.||$131.25 million||5.51||$37.01 million||($0.45)||-29.07|
Parkway Properties has higher revenue and earnings than NorthStar Realty Europe Corp..
NorthStar Realty Europe Corp. beats Parkway Properties on 7 of the 13 factors compared between the two stocks.
About Parkway Properties
Parkway, Inc. is a self-managed real estate investment trust (REIT). The Company owns and operates office properties located in submarkets in Houston, Texas. As of December 31, 2016, the Company’s portfolio consisted of five Class A assets comprising 19 buildings and totaling approximately 8.7 million rentable square feet in the Greenway, Galleria and Westchase submarkets of Houston. In addition, the Company operates a fee-based real estate service (the Third-Party Services Business) through a subsidiary, Eola Office Partners, LLC and its subsidiaries (collectively, Eola), which in total managed approximately 3.8 million square feet (unaudited) for primarily third-party owners, as of December 31, 2016. The Company’s properties include CityWestPlace, San Felipe Plaza, Phoenix Tower, Greenway Plaza and Post Oak Central.
About NorthStar Realty Europe Corp.
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).
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