Head to Head Analysis: Kilroy Realty (KRC) versus Cousins Properties (CUZ)

Kilroy Realty (NYSE: KRC) and Cousins Properties (NYSE:CUZ) are both mid-cap commercial reits – nec companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Dividends

Kilroy Realty pays an annual dividend of $1.70 per share and has a dividend yield of 2.4%. Cousins Properties pays an annual dividend of $0.24 per share and has a dividend yield of 2.7%. Kilroy Realty pays out 111.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cousins Properties pays out 41.4% of its earnings in the form of a dividend. Kilroy Realty has raised its dividend for 2 consecutive years and Cousins Properties has raised its dividend for 4 consecutive years. Cousins Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Kilroy Realty and Cousins Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kilroy Realty 0 6 3 0 2.33
Cousins Properties 0 0 4 0 3.00

Kilroy Realty presently has a consensus target price of $76.86, indicating a potential upside of 8.45%. Cousins Properties has a consensus target price of $10.13, indicating a potential upside of 12.00%. Given Cousins Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Cousins Properties is more favorable than Kilroy Realty.

Profitability

This table compares Kilroy Realty and Cousins Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kilroy Realty 23.77% 4.44% 2.45%
Cousins Properties 48.08% 8.39% 5.42%

Earnings and Valuation

This table compares Kilroy Realty and Cousins Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kilroy Realty $642.57 million 10.85 $293.78 million $1.52 46.63
Cousins Properties $259.21 million 14.65 $79.10 million $0.58 15.59

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

Risk and Volatility

Kilroy Realty has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Cousins Properties has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Insider and Institutional Ownership

97.8% of Kilroy Realty shares are owned by institutional investors. 2.3% of Kilroy Realty shares are owned by insiders. Comparatively, 1.1% of Cousins Properties shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Cousins Properties beats Kilroy Realty on 11 of the 17 factors compared between the two stocks.

Kilroy Realty Company Profile

Kilroy Realty Corporation is a real estate investment trust (REIT). The Company operates through the office properties segment. It operates in office and mixed-use submarkets along the West Coast. It owns, develops, acquires and manages real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area and Greater Seattle. It owns its interests in all of its real estate assets through Kilroy Realty, L.P. (Operating Partnership) and the Kilroy Realty Finance Partnership, L.P. (Finance Partnership). Its stabilized portfolio includes all of its properties with the exception of development and redevelopment properties under construction or committed for construction, lease-up properties, real estate assets held for sale and undeveloped land. As of December 31, 2016, its stabilized portfolio of operating properties included 108 stabilized office properties and a stabilized residential property.

Cousins Properties Company Profile

Cousins Properties Incorporated is a self-administered and self-managed real estate investment trust. The Company’s segments include Office, Mixed-Use, Other, Atlanta, Austin, Charlotte, Orlando, Tampa, Phoenix and Other. It develops, acquires, leases, manages and owns primarily Class A office properties and opportunistic mixed-use developments in Sunbelt markets with a focus on Georgia, Texas and North Carolina. It manages a 15.8 million-square-foot trophy office portfolio in the Sun Belt markets of Atlanta, Austin, Charlotte, Orlando, Tampa and Tempe. As of December 31, 2016, its portfolio of real estate assets consisted of interests in 16.2 million square feet of office space and 786,000 square feet of mixed-use space. The Company, through Cousins TRS Services LLC, owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Its properties include Colorado Tower, 816 Congress, Promenade and Gateway Village.

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