Head-To-Head Review: EPR Properties (EPR) and Alexandria Real Estate Equities (ARE)
EPR Properties (NYSE: EPR) and Alexandria Real Estate Equities (NYSE:ARE) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.
EPR Properties pays an annual dividend of $4.08 per share and has a dividend yield of 6.4%. Alexandria Real Estate Equities pays an annual dividend of $3.44 per share and has a dividend yield of 2.7%. EPR Properties pays out 121.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities pays out 390.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EPR Properties has raised its dividend for 6 consecutive years and Alexandria Real Estate Equities has raised its dividend for 6 consecutive years. EPR Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares EPR Properties and Alexandria Real Estate Equities’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|EPR Properties||$493.24 million||9.58||$224.98 million||$3.36||19.10|
|Alexandria Real Estate Equities||$921.71 million||13.44||-$65.90 million||$0.88||147.12|
EPR Properties has higher earnings, but lower revenue than Alexandria Real Estate Equities. EPR Properties is trading at a lower price-to-earnings ratio than Alexandria Real Estate Equities, indicating that it is currently the more affordable of the two stocks.
This table compares EPR Properties and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alexandria Real Estate Equities||13.21%||3.69%||1.83%|
Institutional & Insider Ownership
88.5% of EPR Properties shares are owned by institutional investors. 1.5% of EPR Properties shares are owned by company insiders. Comparatively, 1.5% of Alexandria Real Estate Equities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
EPR Properties has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.
This is a summary of recent ratings and target prices for EPR Properties and Alexandria Real Estate Equities, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alexandria Real Estate Equities||0||2||5||0||2.71|
EPR Properties presently has a consensus target price of $77.00, suggesting a potential upside of 20.01%. Alexandria Real Estate Equities has a consensus target price of $94.06, suggesting a potential downside of 27.34%. Given EPR Properties’ higher possible upside, research analysts plainly believe EPR Properties is more favorable than Alexandria Real Estate Equities.
EPR Properties beats Alexandria Real Estate Equities on 9 of the 16 factors compared between the two stocks.
About EPR Properties
EPR Properties is a specialty real estate investment trust. The Company’s investment portfolio includes primarily entertainment, education and recreation properties. The Company’s segments include Entertainment, Education, Recreation and Other. The Entertainment segment consists of investments in megaplex theatres, entertainment retail centers, family entertainment centers and other retail parcels. The Education segment consists of investments in public charter schools, early education centers and K-12 private schools. The Recreation segment consists of investments in ski areas, waterparks, golf entertainment complexes and other recreation. The Other segment consists primarily of land under ground lease, property under development and land held for development. As of December 31, 2016, the Company’s owned real estate portfolio of megaplex theatres consisted of approximately 10.6 million square feet.
About Alexandria Real Estate Equities
Alexandria Real Estate Equities, Inc. is a real estate investment (REIT). The Company is engaged in the business of providing space for lease to the life science and technology industries. It focuses on collaborative life science and technology campuses. It develops urban cluster campuses and ecosystems. As of December 31, 2016, the Company had 199 properties in North America. As of December 31, 2016, its asset base in North America consisted of 25.2 million square feet, including 19.9 million rentable square feet/foot (RSF) of operating properties, and development and redevelopment of under construction or pre-construction, as well as 5.3 million square feet of future ground-up development projects. Its properties are located in various areas, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle Park. Its properties include Alexandria Technology Square, Alexandria Park at 128 and Alexandria Technology Center-Gateway.
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