EastGroup Properties (NYSE: EGP) and Gramercy Property Trust (NYSE:GPT) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Institutional & Insider Ownership

96.4% of EastGroup Properties shares are owned by institutional investors. Comparatively, 86.8% of Gramercy Property Trust shares are owned by institutional investors. 2.9% of EastGroup Properties shares are owned by insiders. Comparatively, 1.0% of Gramercy Property Trust shares are owned 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.

Dividends

EastGroup Properties pays an annual dividend of $2.56 per share and has a dividend yield of 2.8%. Gramercy Property Trust pays an annual dividend of $1.50 per share and has a dividend yield of 4.9%. EastGroup Properties pays out 107.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gramercy Property Trust pays out 1,666.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EastGroup Properties has raised its dividend for 2 consecutive years and Gramercy Property Trust has raised its dividend for 5 consecutive years. Gramercy Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current recommendations and price targets for EastGroup Properties and Gramercy Property Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EastGroup Properties 1 9 2 0 2.08
Gramercy Property Trust 1 1 3 0 2.40

EastGroup Properties presently has a consensus price target of $84.90, suggesting a potential downside of 6.60%. Gramercy Property Trust has a consensus price target of $31.67, suggesting a potential upside of 3.42%. Given Gramercy Property Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Gramercy Property Trust is more favorable than EastGroup Properties.

Risk and Volatility

EastGroup Properties has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Gramercy Property Trust has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Earnings and Valuation

This table compares EastGroup Properties and Gramercy Property Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EastGroup Properties $263.59 million 11.78 $161.56 million $2.38 38.19
Gramercy Property Trust $525.64 million 9.36 $368.69 million $0.09 340.26

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

Profitability

This table compares EastGroup Properties and Gramercy Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EastGroup Properties 30.03% 11.90% 4.37%
Gramercy Property Trust 4.56% 0.90% 0.43%

Summary

EastGroup Properties beats Gramercy Property Trust on 9 of the 17 factors compared between the two stocks.

About EastGroup Properties

EastGroup Properties, Inc. is an equity real estate investment trust (REIT). The Company is focused on the development, acquisition and operation of industrial properties in various Sunbelt markets across the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company holds its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria. The Company may provide financing in connection with such sales of property if market conditions require. In addition, the Company may provide financing to a partner or co-owner in connection with an acquisition of real estate in certain situations. The Company owned 327 industrial properties and one office building as of December 31, 2016. The Company’s properties in North Carolina include Lindbergh Business Park, Nations Ford Business Park and Airport Commerce Center in Charlotte area.

About Gramercy Property Trust

Gramercy Property Trust is a real estate investment trust (REIT), which is an investor and asset manager of commercial real estate. The Company’s operating segments include Investments/Corporate and Asset Management. The Investments/Corporate segment includes all of its activities related to the investment and ownership of commercial properties located throughout the United States and Europe. The Asset Management segment includes substantially all of its activities related to asset and property management of commercial properties located throughout the United States and Europe. It is engaged in acquiring and managing single-tenant, net leased industrial, office and specialty properties. It focuses on income producing properties leased to tenants in markets in the United States and Europe. It earns revenues through rental revenues on properties that it owns in the United States and asset management revenues on properties owned by third parties in the United States and Europe.

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