Easterly Government Properties (NYSE: DEA) and NRF Holdco (NYSE:NRF) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.
Insider and Institutional Ownership
87.2% of Easterly Government Properties shares are held by institutional investors. Comparatively, 69.7% of NRF Holdco shares are held by institutional investors. 15.6% of Easterly Government Properties shares are held by company insiders. Comparatively, 2.4% of NRF Holdco shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Easterly Government Properties and NRF Holdco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Easterly Government Properties||3.12%||0.54%||0.32%|
Earnings & Valuation
This table compares Easterly Government Properties and NRF Holdco’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Easterly Government Properties||$104.62 million||8.60||$3.41 million||$0.10||205.00|
Easterly Government Properties has higher revenue and earnings than NRF Holdco. NRF Holdco is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Easterly Government Properties has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, NRF Holdco has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.
Easterly Government Properties pays an annual dividend of $1.04 per share and has a dividend yield of 5.1%. NRF Holdco pays an annual dividend of $1.60 per share and has a dividend yield of 9.9%. Easterly Government Properties pays out 1,040.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NRF Holdco pays out -88.9% of its earnings in the form of a dividend. Easterly Government Properties has raised its dividend for 2 consecutive years. NRF Holdco is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current ratings and price targets for Easterly Government Properties and NRF Holdco, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Easterly Government Properties||0||0||2||0||3.00|
Easterly Government Properties presently has a consensus target price of $24.00, suggesting a potential upside of 17.07%. Given Easterly Government Properties’ higher possible upside, equities research analysts clearly believe Easterly Government Properties is more favorable than NRF Holdco.
Easterly Government Properties beats NRF Holdco on 11 of the 14 factors compared between the two stocks.
About Easterly Government Properties
Easterly Government Properties, Inc. is an internally managed real estate investment trust (REIT). The Company focuses on the acquisition, development and management of Class A commercial properties that are leased to the United States Government agencies. The Company leases its properties to such agencies through the United States General Services Administration (GSA). The operations of the Company are carried on primarily through Easterly Government Properties, LP and the subsidiaries of the Operating Partnership. As of December 31, 2016, it had 43 operating properties in the United States, including 40 operating properties that are leased primarily to the United States Government tenant agencies and three operating properties that are entirely leased to private tenants, encompassing approximately 3.1 million square feet in the aggregate. In addition, the Company had one property under development encompassing approximately 0.1 million square feet as of December 31, 2016.
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.
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