Douglas Emmett (NYSE: DEI) and Vornado Realty Trust (NYSE:VNO) are both financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.
This table compares Douglas Emmett and Vornado Realty 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%|
This table compares Douglas Emmett and Vornado Realty Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Douglas Emmett||$742.55 million||8.30||$85.39 million||$0.52||69.88|
|Vornado Realty Trust||$2.51 billion||5.11||$906.91 million||$4.14||16.29|
Vornado Realty Trust has higher revenue and earnings than Douglas Emmett. Vornado Realty Trust is trading at a lower price-to-earnings ratio than Douglas Emmett, indicating that it is currently the more affordable of the two stocks.
Douglas Emmett pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Vornado Realty Trust pays an annual dividend of $2.52 per share and has a dividend yield of 3.7%. Douglas Emmett pays out 192.3% 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 pays out 60.9% of its earnings in the form of a dividend. Douglas Emmett has raised its dividend for 7 consecutive years. Vornado Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Douglas Emmett has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Vornado Realty Trust has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for Douglas Emmett and Vornado Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Vornado Realty Trust||0||4||7||0||2.64|
Douglas Emmett currently has a consensus target price of $41.25, indicating a potential upside of 13.51%. Vornado Realty Trust has a consensus target price of $89.60, indicating a potential upside of 32.82%. Given Vornado Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Vornado Realty Trust is more favorable than Douglas Emmett.
Institutional & Insider Ownership
96.4% of Douglas Emmett shares are held by institutional investors. Comparatively, 85.5% of Vornado Realty Trust shares are held by institutional investors. 17.8% of Douglas Emmett shares are held by insiders. Comparatively, 9.8% of Vornado Realty Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Vornado Realty Trust beats Douglas Emmett on 12 of the 17 factors compared between the two stocks.
About Douglas Emmett
Douglas Emmett, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is owner and operator of office and multifamily properties located in submarkets in Los Angeles and Honolulu. The Company operates through two segments: the acquisition, development, ownership and management of office real estate (Office Segment), and the acquisition, development, ownership and management of multifamily real estate (Multifamily Segment). The services for its Office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for its Multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. It focuses on owning, acquiring developing and managing a substantial share of office properties and multifamily communities in neighborhoods.
About Vornado Realty Trust
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.
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