Analyzing TIER REIT (TIER) & Mack Cali Realty (CLI)

TIER REIT (NYSE: TIER) and Mack Cali Realty (NYSE:CLI) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Profitability

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
TIER REIT 40.68% 12.86% 5.60%
Mack Cali Realty 4.14% 1.53% 0.54%

Volatility and Risk

TIER REIT has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Mack Cali Realty has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Valuation and Earnings

This table compares TIER REIT and Mack Cali Realty’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TIER REIT $242.82 million 3.44 -$29.41 million $1.82 9.60
Mack Cali Realty $613.40 million 2.82 $117.22 million $0.23 83.61

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.

Institutional and Insider Ownership

58.9% of TIER REIT shares are owned by institutional investors. Comparatively, 98.3% of Mack Cali Realty shares are owned by institutional investors. 1.2% of TIER REIT shares are owned by company insiders. Comparatively, 6.8% of Mack Cali Realty shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

TIER REIT pays an annual dividend of $0.72 per share and has a dividend yield of 4.1%. Mack Cali Realty pays an annual dividend of $0.80 per share and has a dividend yield of 4.2%. 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for TIER REIT and Mack Cali Realty, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TIER REIT 0 0 2 0 3.00
Mack Cali Realty 2 2 2 0 2.00

TIER REIT currently has a consensus price target of $21.00, indicating a potential upside of 20.21%. Mack Cali Realty has a consensus price target of $27.17, indicating a potential upside of 41.27%. Given Mack Cali Realty’s higher possible upside, analysts clearly believe Mack Cali Realty is more favorable than TIER REIT.

Summary

Mack Cali Realty beats TIER REIT on 8 of the 15 factors compared between the two stocks.

TIER REIT Company Profile

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.

Mack Cali Realty Company Profile

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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