Vornado Realty Trust (NYSE: VNO) and American Assets Trust (NYSE:AAT) are both large-cap commercial reits – nec companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.

Valuation & Earnings

This table compares Vornado Realty Trust and American Assets Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Vornado Realty Trust $2.51 billion 5.55 $906.91 million $4.20 17.44
American Assets Trust $295.09 million 6.13 $45.63 million $0.66 58.12

Vornado Realty Trust has higher revenue and earnings than American Assets Trust. Vornado Realty Trust is trading at a lower price-to-earnings ratio than American Assets Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Vornado Realty Trust pays an annual dividend of $2.40 per share and has a dividend yield of 3.3%. American Assets Trust pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. Vornado Realty Trust pays out 57.1% of its earnings in the form of a dividend. American Assets Trust pays out 157.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vornado Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Vornado Realty Trust and American Assets Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vornado Realty Trust 0 3 7 0 2.70
American Assets Trust 0 2 1 0 2.33

Given Vornado Realty Trust’s stronger consensus rating and higher probable upside, research analysts clearly believe Vornado Realty Trust is more favorable than American Assets Trust.

Institutional & Insider Ownership

85.6% of Vornado Realty Trust shares are held by institutional investors. Comparatively, 97.6% of American Assets Trust shares are held by institutional investors. 9.7% of Vornado Realty Trust shares are held by company insiders. Comparatively, 34.2% of American Assets Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Vornado Realty Trust and American Assets Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vornado Realty Trust 35.23% 4.73% 1.43%
American Assets Trust 10.90% 3.97% 1.58%

Risk and Volatility

Vornado Realty Trust has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, American Assets Trust has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Summary

Vornado Realty Trust beats American Assets Trust on 11 of the 16 factors compared between the two stocks.

Vornado Realty Trust Company Profile

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.

American Assets Trust Company Profile

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust (REIT). The Company owns, operates, acquires and develops retail, office, multifamily and mixed-use properties in Southern California, Northern California, Oregon, Washington, Texas and Hawaii markets. The Company operates in four business segments: retail, office, multifamily and mixed-use. As of December 31, 2016, the Company’s portfolio consisted of 11 retail shopping centers; seven office properties; a mixed-use property consisting of a 369-room all-suite hotel and a retail shopping center, and five multifamily properties. Additionally, as of December 31, 2016, the Company owned land at four of its properties that it classified as held for development and construction in progress. The Company’s markets include San Diego, the San Francisco Bay Area, Portland, Oregon, Bellevue, Washington and Oahu, Hawaii.

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