Financial Survey: Education Realty Trust (EDR) vs. MGM Growth Properties (MGP)

Education Realty Trust (NYSE:EDR) and MGM Growth Properties (NYSE:MGP) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of current recommendations for Education Realty Trust and MGM Growth Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Education Realty Trust 1 3 5 0 2.44
MGM Growth Properties 0 3 7 0 2.70

Education Realty Trust presently has a consensus target price of $41.93, indicating a potential upside of 1,321.31%. MGM Growth Properties has a consensus target price of $32.67, indicating a potential upside of 17.63%. Given Education Realty Trust’s higher probable upside, equities research analysts plainly believe Education Realty Trust is more favorable than MGM Growth Properties.

Profitability

This table compares Education Realty Trust and MGM Growth Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Education Realty Trust 38.30% 6.70% 4.16%
MGM Growth Properties 5.85% 0.81% 0.47%

Earnings & Valuation

This table compares Education Realty Trust and MGM Growth Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Education Realty Trust $331.07 million 0.72 $47.44 million $1.90 1.55
MGM Growth Properties $765.70 million 2.57 $41.77 million $2.01 13.82

Education Realty Trust has higher earnings, but lower revenue than MGM Growth Properties. Education Realty Trust is trading at a lower price-to-earnings ratio than MGM Growth Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

Education Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 52.9%. MGM Growth Properties pays an annual dividend of $1.75 per share and has a dividend yield of 6.3%. Education Realty Trust pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGM Growth Properties pays out 87.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Education Realty Trust has raised its dividend for 7 consecutive years. Education Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Education Realty Trust has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, MGM Growth Properties has a beta of -0.41, suggesting that its share price is 141% less volatile than the S&P 500.

Summary

Education Realty Trust beats MGM Growth Properties on 9 of the 15 factors compared between the two stocks.

About Education Realty Trust

A leader in the collegiate housing industry since 1964, EdR is one of the largest developers, owners and managers of high-quality collegiate housing communities. EdR is a self-administered and self-managed real estate investment trust (REIT) publicly traded on the New York Stock Exchange (NYSE: EDR). As a REIT, we create and own properties that will bring value to our portfolio and stockholders for a long time. Our projects are built to last and to be profitable for many years to come.

About MGM Growth Properties

MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. As of June 30, 2018, MGP owns a portfolio of properties acquired from MGM Resorts, consisting of 11 premier destination resorts in Las Vegas and elsewhere across the United States, and the Park, a dining and entertainment complex which opened in April 2016. As of December 31, 2017, these properties collectively comprise over 27,500 hotel rooms, 2.7 million convention square footage, 100 retail outlets, 200 food and beverage outlets and 20 entertainment venues. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries that may be developed in the future.

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