Equity Commonwealth (NYSE: EQC) and Corporate Office Properties Trust (NYSE:OFC) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.
This table compares Equity Commonwealth and Corporate Office Properties Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Corporate Office Properties Trust||15.86%||6.55%||2.48%|
Insider & Institutional Ownership
94.5% of Equity Commonwealth shares are owned by institutional investors. 1.0% of Equity Commonwealth shares are owned by company insiders. Comparatively, 0.6% of Corporate Office Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Corporate Office Properties Trust pays an annual dividend of $1.10 per share and has a dividend yield of 3.3%. Equity Commonwealth does not pay a dividend. Corporate Office Properties Trust pays out 150.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation and Earnings
This table compares Equity Commonwealth and Corporate Office Properties Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Equity Commonwealth||$409.33 million||9.38||$194.30 million||$0.86||35.98|
|Corporate Office Properties Trust||$578.09 million||5.66||$290.41 million||$0.73||45.29|
Corporate Office Properties Trust has higher revenue and earnings than Equity Commonwealth. Equity Commonwealth is trading at a lower price-to-earnings ratio than Corporate Office Properties Trust, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for Equity Commonwealth and Corporate Office Properties Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Corporate Office Properties Trust||2||7||0||0||1.78|
Equity Commonwealth presently has a consensus target price of $32.50, indicating a potential upside of 5.04%. Corporate Office Properties Trust has a consensus target price of $33.33, indicating a potential upside of 0.83%. Given Equity Commonwealth’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Equity Commonwealth is more favorable than Corporate Office Properties Trust.
Risk and Volatility
Equity Commonwealth has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500. Comparatively, Corporate Office Properties Trust has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.
Equity Commonwealth beats Corporate Office Properties Trust on 10 of the 15 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 August 14, 2017, the Company’s portfolio included 20 properties and 11 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.
Corporate Office Properties Trust Company Profile
Corporate Office Properties Trust is a fully-integrated and self-managed real estate investment trust (REIT). The Company owns, manages, leases, develops and acquires office and data center properties. The Company’s segments are Defense/IT Locations; Regional Office; operating wholesale data center, and other. As of December 31, 2016, the Company’s properties included 164 operating office properties totaling 17.2 million square feet, including 13 triple-net leased, single-tenant data center properties; 11 office properties under construction or redevelopment; 1,028 acres of land controlled for future development, and a wholesale data center with a critical load of 19.25 megawatts. The Company conducts all of its operations through Corporate Office Properties, L.P. (COPLP) and subsidiaries (collectively, the Operating Partnership). COPLP owns real estate both directly and through subsidiary partnerships and limited liability companies (LLCs).
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