Parkway (NYSE: PKY) and TIER REIT (OTCMKTS:TIER) are both small-cap financials companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Institutional and Insider Ownership

97.1% of Parkway shares are held by institutional investors. 4.9% of Parkway shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Parkway and TIER REIT’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Parkway $182.22 million 5.14 $54.29 million N/A N/A
TIER REIT $220.99 million 4.15 $99.25 million N/A N/A

TIER REIT has higher revenue and earnings than Parkway.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Parkway and TIER REIT, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parkway 0 3 1 0 2.25
TIER REIT 0 0 2 0 3.00

Parkway currently has a consensus price target of $23.25, suggesting a potential upside of 22.11%. TIER REIT has a consensus price target of $20.50, suggesting a potential upside of 7.05%. Given Parkway’s higher probable upside, analysts plainly believe Parkway is more favorable than TIER REIT.

Profitability

This table compares Parkway and TIER REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parkway -25.52% -3.82% -2.30%
TIER REIT -4.62% 2.28% -0.64%

Dividends

Parkway pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. TIER REIT does not pay a dividend.

Summary

TIER REIT beats Parkway on 7 of the 12 factors compared between the two stocks.

About Parkway

Parkway, Inc. is a self-managed real estate investment trust (REIT). The Company owns and operates office properties located in submarkets in Houston, Texas. As of December 31, 2016, the Company’s portfolio consisted of five Class A assets comprising 19 buildings and totaling approximately 8.7 million rentable square feet in the Greenway, Galleria and Westchase submarkets of Houston. In addition, the Company operates a fee-based real estate service (the Third-Party Services Business) through a subsidiary, Eola Office Partners, LLC and its subsidiaries (collectively, Eola), which in total managed approximately 3.8 million square feet (unaudited) for primarily third-party owners, as of December 31, 2016. The Company’s properties include CityWestPlace, San Felipe Plaza, Phoenix Tower, Greenway Plaza and Post Oak Central.

About TIER REIT

TIER REIT, Inc. is a real estate investment trust. The Company’s business consists of owning, acquiring, developing, operating, investing in, and disposing of real estate assets. The Company’s business is conducted through Tier Operating Partnership LP (Tier OP). As of December 31, 2016, the Company owned interests in 29 operating office properties, one non-operating property and one development property located in 13 markets throughout the United States. It owns properties located in metropolitan cities and suburban markets in the United States. The Company’s office properties include The Terrace Office Park, Domain 3, Domain 4, 5950 Sherry Lane, Burnett Plaza, Loop Central, One BriarLake Plaza, Three Eldridge Place, Eisenhower I, Forum Office Park, 500 E. Pratt, Woodcrest Corporate Center and 111 Woodcrest. The Company’s properties are located in Austin, Dallas, Houston, Charlotte, Nashville, Atlanta and Denver.

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