TIER REIT (NYSE: TIER) and Mack Cali Realty (NYSE:CLI) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.
TIER REIT pays an annual dividend of $0.72 per share and has a dividend yield of 3.8%. Mack Cali Realty pays an annual dividend of $0.80 per share and has a dividend yield of 4.1%. TIER REIT pays out 39.6% of its earnings in the form of a dividend. Mack Cali Realty pays out 347.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TIER REIT has increased its dividend for 2 consecutive years and Mack Cali Realty has increased its dividend for 2 consecutive years.
58.7% of TIER REIT shares are owned by institutional investors. Comparatively, 99.1% of Mack Cali Realty shares are owned by institutional investors. 1.2% of TIER REIT shares are owned by insiders. Comparatively, 6.8% of Mack Cali Realty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares TIER REIT and Mack Cali Realty’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TIER REIT||$242.82 million||3.71||-$29.41 million||$1.82||10.34|
|Mack Cali Realty||$613.40 million||2.88||$117.22 million||$0.23||85.31|
Mack Cali Realty has higher revenue and earnings than TIER REIT. TIER REIT is trading at a lower price-to-earnings ratio than Mack Cali Realty, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and price targets for TIER REIT and Mack Cali Realty, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Mack Cali Realty||2||2||2||0||2.00|
TIER REIT presently has a consensus price target of $21.00, indicating a potential upside of 11.58%. Mack Cali Realty has a consensus price target of $27.17, indicating a potential upside of 38.46%. Given Mack Cali Realty’s higher possible upside, analysts clearly believe Mack Cali Realty is more favorable than TIER REIT.
This table compares TIER REIT and Mack Cali Realty’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Mack Cali Realty||4.14%||1.53%||0.54%|
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.
About Mack Cali Realty
Mack-Cali Realty Corporation is a self-administered and self-managed real estate investment trust (REIT). The Company owns and operates a real estate portfolio of Class A office and office/flex properties. It operates in three segments: commercial and other real estate, multi-family real estate and multi-family services. Its commercial and other real estate provides leasing, property management, acquisition, development, construction and tenant-related services for its commercial and other real estate, and multi-family real estate portfolio. Its multi-family services business also provides similar services for third parties. It owned or had interests in approximately 248 properties, consisting of approximately 119 office and approximately 110 flex properties, totaling approximately 26.6 million square feet, leased to approximately 1,600 commercial tenants and approximately 19 multi-family rental properties containing approximately 5,614 residential units, plus developable land.
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