Paramount Group (NYSE: PGRE) and Boston Properties (NYSE:BXP) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares Paramount Group and Boston Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Paramount Group $708.66 million 5.42 $384.89 million $0.41 39.27
Boston Properties $2.57 billion 7.32 $1.51 billion $2.94 41.62

Boston Properties has higher revenue and earnings than Paramount Group. Paramount Group is trading at a lower price-to-earnings ratio than Boston Properties, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

62.8% of Paramount Group shares are owned by institutional investors. Comparatively, 94.6% of Boston Properties shares are owned by institutional investors. 5.7% of Paramount Group shares are owned by insiders. Comparatively, 0.9% of Boston Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Paramount Group and Boston Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paramount Group 13.88% 1.99% 1.12%
Boston Properties 18.18% 5.98% 2.44%

Volatility & Risk

Paramount Group has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, Boston Properties has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Paramount Group and Boston Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paramount Group 2 1 1 0 1.75
Boston Properties 0 8 4 0 2.33

Paramount Group currently has a consensus price target of $15.50, suggesting a potential downside of 3.73%. Boston Properties has a consensus price target of $134.55, suggesting a potential upside of 9.96%. Given Boston Properties’ stronger consensus rating and higher possible upside, analysts clearly believe Boston Properties is more favorable than Paramount Group.

Dividends

Paramount Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.4%. Boston Properties pays an annual dividend of $3.00 per share and has a dividend yield of 2.5%. Paramount Group pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Summary

Boston Properties beats Paramount Group on 13 of the 16 factors compared between the two stocks.

Paramount Group Company Profile

Paramount Group, Inc. is a fully-integrated real estate investment trust (REIT) focused on owning, operating, managing, acquiring and redeveloping Class A office properties in select central business district submarkets of New York City, Washington, District of Columbia (D.C.) and San Francisco. The Company conducts its business through, and substantially all its interests in properties and investments are held by, Paramount Group Operating Partnership LP (the Operating Partnership). The Company’s segments include New York, Washington, D.C. and San Francisco. As of December 31, 2016, the Company’s portfolio consisted of 13 Class A office properties aggregating approximately 10.8 million square feet that was 93.3% leased and 90.9% occupied. The Company also has an investment management business, where it serves as the general partner and property manager of certain private equity real estate funds for institutional investors and high-net-worth individuals.

Boston Properties Company Profile

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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