Education Realty Trust (EDR) versus Colony Capital (CLNY) Critical Review
Education Realty Trust (NYSE: EDR) and Colony Capital (NYSE:CLNY) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.
Education Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 4.1%. Colony Capital pays an annual dividend of $1.60 per share and has a dividend yield of 7.4%. Education Realty Trust pays out 371.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Colony Capital pays out 179.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Education Realty Trust has raised its dividend for 6 consecutive years and Colony Capital has raised its dividend for 7 consecutive years. Colony Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
94.1% of Colony Capital shares are owned by institutional investors. 0.5% of Education Realty Trust shares are owned by company insiders. Comparatively, 17.7% of Colony Capital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Education Realty Trust and Colony Capital, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Education Realty Trust||1||7||4||0||2.25|
Education Realty Trust presently has a consensus price target of $44.38, suggesting a potential upside of 16.62%. Colony Capital has a consensus price target of $27.00, suggesting a potential upside of 25.46%. Given Colony Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Colony Capital is more favorable than Education Realty Trust.
Volatility & Risk
Education Realty Trust has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Colony Capital has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.
Valuation and Earnings
This table compares Education Realty Trust and Colony Capital’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Education Realty Trust||$310.48 million||8.97||$143.74 million||$0.42||90.60|
Education Realty Trust has higher revenue and earnings than Colony Capital. Colony Capital is trading at a lower price-to-earnings ratio than Education Realty Trust, indicating that it is currently the more affordable of the two stocks.
This table compares Education Realty Trust and Colony Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Education Realty Trust||10.58%||1.83%||1.25%|
Colony Capital beats Education Realty Trust on 12 of the 14 factors compared between the two stocks.
Education Realty Trust Company Profile
Education Realty Trust, Inc. (EdR) is a self-managed and self-advised real estate investment trust (REIT). The Trust is engaged in developing, acquiring, owning and managing collegiate housing communities located near university campuses. The Trust operates through three segments: collegiate housing leasing, development consulting services and management services. The Trust develops collegiate housing communities for its own account and also provides third-party development consulting services on collegiate housing development projects for universities and other third parties. As of December 31, 2016, the Trust owned 64 collegiate housing communities located in 22 states containing 32,729 beds in 12,294 apartment units on or near 38 university campuses. As of December 31, 2016, the Trust provided third-party management services for 22 collegiate housing communities located in 11 states containing 11,767 beds in 4,214 apartment units on or near 17 university campuses.
Colony Capital Company Profile
Colony Capital, Inc., formerly Colony Financial, Inc., is a global real estate and investment management company. The Company operates through five segments: Real Estate Equity, including Light industrial real estate assets and operating platform; Single-family residential rentals through an investment in Colony Starwood Homes and Other real estate equity investments; Real Estate Debt, which includes loan originations and acquisitions, and Investment Management, which includes investment management of the Company-sponsored funds and other investment vehicles. Through its global investment management business, it has over $18.8 billion of assets under management. Its business objective is to provide risk-adjusted returns to its investors through a diversified portfolio of direct and indirect real estate-related equity and real estate debt investments, and fee bearing management contracts on investment funds that it manages.
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