Contrasting Vornado Realty Trust (VNO) & VEREIT (VER)
Vornado Realty Trust (NYSE: VNO) and VEREIT (NYSE:VER) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
Insider & Institutional Ownership
85.9% of Vornado Realty Trust shares are held by institutional investors. Comparatively, 86.0% of VEREIT shares are held by institutional investors. 9.7% of Vornado Realty Trust shares are held by insiders. Comparatively, 0.1% of VEREIT shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Vornado Realty Trust and VEREIT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Vornado Realty Trust||37.96%||4.51%||1.39%|
Earnings & Valuation
This table compares Vornado Realty Trust and VEREIT’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Vornado Realty Trust||$2.70 billion||5.25||$1.40 billion||$4.64||16.13|
|VEREIT||$1.40 billion||5.64||$1.12 billion||($0.11)||-73.72|
Vornado Realty Trust has higher revenue and earnings than VEREIT. VEREIT is trading at a lower price-to-earnings ratio than Vornado Realty Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and target prices for Vornado Realty Trust and VEREIT, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Vornado Realty Trust||0||3||7||0||2.70|
Vornado Realty Trust currently has a consensus target price of $92.40, indicating a potential upside of 23.45%. VEREIT has a consensus target price of $10.00, indicating a potential upside of 23.30%. Given Vornado Realty Trust’s stronger consensus rating and higher possible upside, research analysts clearly believe Vornado Realty Trust is more favorable than VEREIT.
Risk & Volatility
Vornado Realty Trust has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, VEREIT has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.
Vornado Realty Trust pays an annual dividend of $2.40 per share and has a dividend yield of 3.2%. VEREIT pays an annual dividend of $0.55 per share and has a dividend yield of 6.8%. Vornado Realty Trust pays out 51.7% of its earnings in the form of a dividend. VEREIT pays out -500.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. VEREIT is clearly the better dividend stock, given its higher yield and lower payout ratio.
Vornado Realty Trust beats VEREIT on 12 of the 16 factors compared between the two stocks.
About Vornado Realty Trust
Vornado Realty Trust is a real estate investment trust (REIT). The Company conducts its business through Vornado Realty L.P. (the Operating Partnership). The Company operates through two segments: New York and Washington, DC. As of December 31, 2016, the Company’s New York segment consisted of 28.3 million square feet in 86 properties. Its properties include 1290 Avenue of the Americas, Two Penn Plaza, 770 Broadway and 90 Park Avenue. As of December 31, 2016, the Company’s Washington, DC segment consisted of 58 properties aggregating 14.7 million square feet, including 11.1 million square feet of office space in 44 properties, nine residential properties containing 3,156 units and a hotel property. Its properties include 2001 Jefferson Davis Highway, 223 23rd Street, 2221 South Clark Street and 1700 M Street. The Company’s interests in properties are held by the Operating Partnership. As of December 31, 2016, the Company owned the 3.7 million square foot Mart (theMart) in Chicago.
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.
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