Critical Comparison: Duke Realty Corporation (DRE) versus First Industrial Realty Trust (FR)

Duke Realty Corporation (NYSE: DRE) and First Industrial Realty Trust (NYSE:FR) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility & Risk

Duke Realty Corporation has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, First Industrial Realty Trust has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Earnings and Valuation

This table compares Duke Realty Corporation and First Industrial Realty Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Duke Realty Corporation $922.63 million 11.38 $508.55 million $4.03 7.32
First Industrial Realty Trust $386.50 million 9.72 $253.02 million $0.98 31.98

Duke Realty Corporation has higher revenue and earnings than First Industrial Realty Trust. Duke Realty Corporation is trading at a lower price-to-earnings ratio than First Industrial Realty Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Duke Realty Corporation and First Industrial Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Duke Realty Corporation 166.06% 8.72% 4.74%
First Industrial Realty Trust 29.91% 8.88% 4.12%

Institutional and Insider Ownership

93.7% of Duke Realty Corporation shares are held by institutional investors. Comparatively, 92.4% of First Industrial Realty Trust shares are held by institutional investors. 0.3% of Duke Realty Corporation shares are held by insiders. Comparatively, 1.8% of First Industrial Realty Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Duke Realty Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 2.6%. First Industrial Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 2.7%. Duke Realty Corporation pays out 18.9% of its earnings in the form of a dividend. First Industrial Realty Trust pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Duke Realty Corporation has increased its dividend for 2 consecutive years and First Industrial Realty Trust has increased its dividend for 3 consecutive years. First Industrial Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Duke Realty Corporation and First Industrial Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Duke Realty Corporation 0 4 6 0 2.60
First Industrial Realty Trust 0 4 1 0 2.20

Duke Realty Corporation presently has a consensus price target of $29.22, indicating a potential downside of 0.98%. First Industrial Realty Trust has a consensus price target of $30.25, indicating a potential downside of 3.48%. Given Duke Realty Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Duke Realty Corporation is more favorable than First Industrial Realty Trust.

Summary

Duke Realty Corporation beats First Industrial Realty Trust on 12 of the 17 factors compared between the two stocks.

About Duke Realty Corporation

Duke Realty Corporation is a self-managed real estate investment trust (REIT). The Company and Duke Realty Limited Partnership collectively specialize in the ownership, management and development of bulk distribution (industrial) and medical office real estate. It operates through three segments, the first two of which consist of the ownership and rental of industrial and medical office real estate investments. The operations of its industrial and medical office properties, as well as its rental operations, are collectively referred to as Rental Operations. The third segment includes real estate services, such as property management, asset management, leasing, development, general contracting and construction management. Its Service Operations segment also includes its taxable REIT subsidiary, through which certain of the segment’s operations are conducted. It maintains a Baa1 rating from Moody’s Investor Service, Inc. and a BBB+ rating from Standard & Poor’s Financial Services LLC.

About First Industrial Realty Trust

First Industrial Realty Trust, Inc. is a real estate investment trust (REIT). The Trust is a self-administered real estate company, which owns, manages, acquires, sells, develops and redevelops industrial real estate. As of December 31, 2016, the Company’s in-service portfolio consisted of 215 light industrial properties, 53 research and development (R&D)/flex properties, 167 bulk warehouse properties and 100 regional warehouse properties containing an aggregate of approximately 62.2 million square feet of gross leasable area (GLA) located in 23 states. The Company’s in-service portfolio includes all properties that have reached stabilized occupancy, developed and redeveloped properties and acquired properties that are occupied at acquisition or one year from the acquisition date. The Company’s operations are conducted primarily through the First Industrial, L.P. (the Operating Partnership), of which the Company is the sole general partner.

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