NRF Holdco (NYSE: NRF) and PS Business Parks (NYSE:PSB) are both financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares NRF Holdco and PS Business Parks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NRF Holdco -16.61% -17.86% -2.44%
PS Business Parks 39.78% 16.95% 7.69%

Earnings & Valuation

This table compares NRF Holdco and PS Business Parks’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
NRF Holdco N/A N/A N/A ($2.38) N/A
PS Business Parks $387.39 million 9.43 $128.02 million $3.00 44.68

PS Business Parks has higher revenue and earnings than NRF Holdco. NRF Holdco is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

69.7% of NRF Holdco shares are owned by institutional investors. Comparatively, 72.7% of PS Business Parks shares are owned by institutional investors. 2.4% of NRF Holdco shares are owned by insiders. Comparatively, 1.6% of PS Business Parks shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

NRF Holdco has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for NRF Holdco and PS Business Parks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NRF Holdco 0 1 0 0 2.00
PS Business Parks 1 1 0 0 1.50

PS Business Parks has a consensus target price of $107.00, suggesting a potential downside of 20.17%.

Dividends

PS Business Parks pays an annual dividend of $3.40 per share and has a dividend yield of 2.5%. NRF Holdco does not pay a dividend. PS Business Parks pays out 113.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks has increased its dividend for 3 consecutive years.

Summary

PS Business Parks beats NRF Holdco on 8 of the 12 factors compared between the two stocks.

About NRF Holdco

NRF Holdco LLC. is a commercial real estate company. The Company invests in multiple asset classes across commercial real estate (CRE). Its portfolio consists of healthcare, hotel, manufactured housing communities, net lease and multifamily properties. The Company also invests in other opportunistic real estate investments, such as indirect interests in real estate through its investments in private equity funds (PE Investments). The Company also acquires and operates hotel and certain healthcare properties. The Company’s segments include Real Estate, Commercial Real Estate Debt (CRE debt), Commercial Real Estate Securities, N-Star CDOs and Corporate. Its real estate equity investments that operate under the REIT Investment Diversification and Empowerment Act (RIDEA) structure generate resident and hotel guest related income from short-term residential agreements. The Company is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc.

About PS Business Parks

PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust (REIT). The Company owns, operates and develops commercial properties, primarily multi-tenant flex, office and industrial parks. It focuses on owning concentrated business parks. PS Business Parks, L.P. (the Operating Partnership) is a California limited partnership, which owns directly or indirectly substantially all of its assets and through, which the Company conducts substantially all of its business. PSB is the partner of the Operating Partnership and, as of December 31, 2016, owned 77.9% of the common partnership units. The remaining common partnership units are owned by Public Storage (PS). As of December 31, 2016, the Company owned and operated 28.1 million rentable square feet of commercial space, comprising 99 business parks, in the states, including California, Texas, Virginia, Florida, Maryland and Washington. It also manages 684,000 rentable square feet on behalf of PS.

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