Contrasting VEREIT (VER) & Kilroy Realty Corporation (KRC)
VEREIT (NYSE: VER) and Kilroy Realty Corporation (NYSE:KRC) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.
This is a summary of recent ratings for VEREIT and Kilroy Realty Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kilroy Realty Corporation||0||5||4||0||2.44|
VEREIT currently has a consensus target price of $9.88, indicating a potential upside of 18.12%. Kilroy Realty Corporation has a consensus target price of $77.50, indicating a potential upside of 8.09%. Given VEREIT’s higher possible upside, research analysts clearly believe VEREIT is more favorable than Kilroy Realty Corporation.
VEREIT pays an annual dividend of $0.55 per share and has a dividend yield of 6.6%. Kilroy Realty Corporation pays an annual dividend of $1.70 per share and has a dividend yield of 2.4%. VEREIT pays out -500.0% of its earnings in the form of a dividend. Kilroy Realty Corporation pays out 122.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. VEREIT is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares VEREIT and Kilroy Realty Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kilroy Realty Corporation||21.75%||4.11%||2.24%|
Volatility and Risk
VEREIT has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Kilroy Realty Corporation has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.
Earnings & Valuation
This table compares VEREIT and Kilroy Realty Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|VEREIT||$1.40 billion||5.82||$1.12 billion||($0.11)||-75.99|
|Kilroy Realty Corporation||$691.90 million||10.19||$400.80 million||$1.39||51.58|
VEREIT has higher revenue and earnings than Kilroy Realty Corporation. VEREIT is trading at a lower price-to-earnings ratio than Kilroy Realty Corporation, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
86.0% of VEREIT shares are owned by institutional investors. Comparatively, 99.8% of Kilroy Realty Corporation shares are owned by institutional investors. 0.1% of VEREIT shares are owned by company insiders. Comparatively, 2.3% of Kilroy Realty Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Kilroy Realty Corporation beats VEREIT on 9 of the 14 factors compared between the two stocks.
VEREIT, Inc. is a full-service real estate operating company. The Company operates through two business segments: real estate investment (REI) segment and investment management segment, Cole Capital. As of December 31, 2016, through its REI segment, the Company owned and managed a portfolio of 4,142 retail, restaurant, office and industrial real estate properties with an aggregate of 93.3 million square feet, which are located in 49 states, Puerto Rico and Canada. Through its Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of certain non-listed real estate investment trusts (the Cole REITs) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include over four publicly registered, non-traded REITs.
About Kilroy Realty Corporation
Kilroy Realty Corporation is a real estate investment trust (REIT). The Company operates through the office properties segment. It operates in office and mixed-use submarkets along the West Coast. It owns, develops, acquires and manages real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area and Greater Seattle. It owns its interests in all of its real estate assets through Kilroy Realty, L.P. (Operating Partnership) and the Kilroy Realty Finance Partnership, L.P. (Finance Partnership). Its stabilized portfolio includes all of its properties with the exception of development and redevelopment properties under construction or committed for construction, lease-up properties, real estate assets held for sale and undeveloped land. As of December 31, 2016, its stabilized portfolio of operating properties included 108 stabilized office properties and a stabilized residential property.
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