Equity Commonwealth (NYSE: EQC) and Gramercy Property Trust (NYSE:GPT) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

93.2% of Equity Commonwealth shares are owned by institutional investors. Comparatively, 82.7% of Gramercy Property Trust shares are owned by institutional investors. 1.0% of Equity Commonwealth shares are owned by insiders. Comparatively, 1.0% of Gramercy Property Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Equity Commonwealth and Gramercy Property Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Commonwealth 0 3 1 0 2.25
Gramercy Property Trust 0 2 2 0 2.50

Equity Commonwealth presently has a consensus target price of $32.00, suggesting a potential upside of 5.09%. Gramercy Property Trust has a consensus target price of $34.00, suggesting a potential upside of 18.30%. Given Gramercy Property Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Gramercy Property Trust is more favorable than Equity Commonwealth.

Valuation and Earnings

This table compares Equity Commonwealth and Gramercy Property Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Equity Commonwealth $409.33 million 9.23 $194.30 million $0.86 35.41
Gramercy Property Trust $525.64 million 8.31 $368.69 million $0.09 319.37

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

Dividends

Gramercy Property Trust pays an annual dividend of $1.50 per share and has a dividend yield of 5.2%. Equity Commonwealth does not pay a dividend. Gramercy Property Trust pays out 1,666.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity Commonwealth has raised its dividend for 2 consecutive years.

Profitability

This table compares Equity Commonwealth and Gramercy Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Commonwealth 28.50% 3.69% 2.52%
Gramercy Property Trust 4.35% 0.81% 0.40%

Risk and Volatility

Equity Commonwealth has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Gramercy Property Trust has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Summary

Equity Commonwealth beats Gramercy Property Trust on 10 of the 17 factors compared between the two stocks.

Equity Commonwealth Company Profile

Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of December 31, 2016, the Company’s portfolio included 33 properties, one land parcel and one property taken out of a service, classified as a land parcel, with a combined 16.1 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.

Gramercy Property Trust Company Profile

Gramercy Property Trust is a real estate investment trust (REIT), which is an investor and asset manager of commercial real estate. The Company’s operating segments include Investments/Corporate and Asset Management. The Investments/Corporate segment includes all of its activities related to the investment and ownership of commercial properties located throughout the United States and Europe. The Asset Management segment includes substantially all of its activities related to asset and property management of commercial properties located throughout the United States and Europe. It is engaged in acquiring and managing single-tenant, net leased industrial, office and specialty properties. It focuses on income producing properties leased to tenants in markets in the United States and Europe. It earns revenues through rental revenues on properties that it owns in the United States and asset management revenues on properties owned by third parties in the United States and Europe.

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