Kilroy Realty Corporation (NYSE: KRC) and DuPont Fabros Technology (NYSE:DFT) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Earnings and Valuation

This table compares Kilroy Realty Corporation and DuPont Fabros Technology’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kilroy Realty Corporation $691.90 million 10.36 $400.80 million $1.39 52.48
DuPont Fabros Technology $543.97 million 9.45 $333.04 million $1.64 40.43

Kilroy Realty Corporation has higher revenue and earnings than DuPont Fabros Technology. DuPont Fabros Technology 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

99.8% of Kilroy Realty Corporation shares are owned by institutional investors. 2.3% of Kilroy Realty Corporation shares are owned by insiders. Comparatively, 5.6% of DuPont Fabros Technology shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Kilroy Realty Corporation pays an annual dividend of $1.70 per share and has a dividend yield of 2.3%. DuPont Fabros Technology pays an annual dividend of $2.00 per share and has a dividend yield of 3.0%. 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. DuPont Fabros Technology pays out 122.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kilroy Realty Corporation has raised its dividend for 5 consecutive years. DuPont Fabros Technology is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings for Kilroy Realty Corporation and DuPont Fabros Technology, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kilroy Realty Corporation 0 5 4 0 2.44
DuPont Fabros Technology 0 9 4 0 2.31

Kilroy Realty Corporation currently has a consensus price target of $77.50, indicating a potential upside of 6.24%. DuPont Fabros Technology has a consensus price target of $60.15, indicating a potential downside of 9.29%. Given Kilroy Realty Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Kilroy Realty Corporation is more favorable than DuPont Fabros Technology.

Risk & Volatility

Kilroy Realty Corporation has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, DuPont Fabros Technology has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Profitability

This table compares Kilroy Realty Corporation and DuPont Fabros Technology’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%
DuPont Fabros Technology 26.98% 17.13% 4.69%

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.

About DuPont Fabros Technology

DuPont Fabros Technology, Inc. (DFT) is a real estate investment trust (REIT). The Company owns, acquires, develops and operates wholesale data centers. The Company’s customers include national and international enterprises across various industries, such as technology, Internet, content providers, cloud providers, media, communications, healthcare and financial services. Its data centers are located in four population centers: Northern Virginia; suburban Chicago, Illinois; Piscataway, New Jersey, and Santa Clara, California. As of December 31, 2016, the Company owned various properties, including 11 operating data centers facilities; five phases of existing data center facilities under development; one shell of a data center under development; two data center facilities with a phase or phases available for development, and parcels of land held for development of four data centers. As of December 31, 2016, the Company’s 11 data centers had a total of 3.3 million gross square feet.

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