Vereit (VER) and Columbia Property Trust (CXP) Critical Contrast

Vereit (NYSE: VER) and Columbia Property Trust (NYSE:CXP) are both mid-cap financials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Dividends

Vereit pays an annual dividend of $0.55 per share and has a dividend yield of 8.0%. Columbia Property Trust pays an annual dividend of $0.80 per share and has a dividend yield of 3.8%. Vereit pays out -423.1% of its earnings in the form of a dividend. Columbia Property Trust pays out 47.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Vereit is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Vereit and Columbia Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vereit -3.76% -0.61% -0.34%
Columbia Property Trust 63.37% 8.10% 4.91%

Insider & Institutional Ownership

85.0% of Vereit shares are held by institutional investors. Comparatively, 69.3% of Columbia Property Trust shares are held by institutional investors. 0.1% of Vereit shares are held by company insiders. Comparatively, 0.5% of Columbia Property Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Vereit and Columbia Property Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vereit $1.45 billion 4.61 -$195.86 million ($0.13) -53.00
Columbia Property Trust $473.54 million 5.28 $84.28 million $1.68 12.43

Columbia Property Trust has lower revenue, but higher earnings than Vereit. Vereit is trading at a lower price-to-earnings ratio than Columbia Property Trust, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Vereit has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Columbia Property Trust has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Vereit and Columbia Property Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vereit 0 1 2 0 2.67
Columbia Property Trust 0 3 3 0 2.50

Vereit presently has a consensus price target of $9.50, suggesting a potential upside of 37.88%. Columbia Property Trust has a consensus price target of $23.50, suggesting a potential upside of 12.49%. Given Vereit’s stronger consensus rating and higher possible upside, analysts clearly believe Vereit is more favorable than Columbia Property Trust.

Summary

Columbia Property Trust beats Vereit on 10 of the 16 factors compared between the two stocks.

About Vereit

VEREIT, Inc. is a full-service real estate operating company. The Company owns and manages a diversified portfolio of retail, restaurant, office and industrial real estate assets. It operates through two segments: real estate investment (REI) segment and its investment management segment, Cole Capital. The Company manages real estate investments on behalf of the Cole Capital. The Cole Capital segment sponsors and manages direct investment real estate programs, which primarily include publicly registered, non-traded real estate investment trusts (REITs). The Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (CCA), which is a subsidiary of the Operating Partnership. The Company’s portfolio consists of Industrial distribution, shopping centers and single-tenant retail. The Company serves in various industries, such as casual dining restaurants, manufacturing, quick service restaurants, grocery and super market, home and garden retail and logistics.

About Columbia Property Trust

Columbia Property Trust, Inc. operates as a real estate investment trust (REIT), which owns and operates commercial real estate properties. The Company’s primary objective is to generate long-term shareholder returns from a combination of steadily growing cash flows and appreciation in its net asset values, through the acquisition and ownership of office buildings located principally in high-barrier-to-entry markets. The Company’s segments include New York, San Francisco, Atlanta, Washington, D.C., Boston, Los Angeles and all other office markets. The all other office markets segment consists of properties in similar, low-barrier to entry geographic locations, in which the Company does not plan to make further investments. The Company conducts its business primarily through Columbia Property Trust Operating Partnership, L.P. (Columbia Property Trust OP), which acquires, develops, owns, leases and operates real properties directly through subsidiaries or through joint ventures.

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