Kilroy Realty Corporation (KRC) versus Federal Realty Investment Trust (FRT) Critical Contrast

Kilroy Realty Corporation (NYSE: KRC) and Federal Realty Investment Trust (NYSE:FRT) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Dividends

Kilroy Realty Corporation pays an annual dividend of $1.70 per share and has a dividend yield of 2.4%. Federal Realty Investment Trust pays an annual dividend of $4.00 per share and has a dividend yield of 3.3%. Kilroy Realty Corporation pays out 111.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust pays out 115.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has increased its dividend for 49 consecutive years. Federal Realty Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

99.8% of Kilroy Realty Corporation shares are owned by institutional investors. Comparatively, 93.5% of Federal Realty Investment Trust shares are owned by institutional investors. 2.3% of Kilroy Realty Corporation shares are owned by insiders. Comparatively, 1.1% of Federal Realty Investment Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Kilroy Realty Corporation and Federal Realty Investment Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kilroy Realty Corporation 0 5 4 0 2.44
Federal Realty Investment Trust 1 2 7 0 2.60

Kilroy Realty Corporation presently has a consensus price target of $77.50, suggesting a potential upside of 8.80%. Federal Realty Investment Trust has a consensus price target of $140.25, suggesting a potential upside of 16.37%. Given Federal Realty Investment Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Federal Realty Investment Trust is more favorable than Kilroy Realty Corporation.

Volatility & Risk

Kilroy Realty Corporation has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500.

Earnings and Valuation

This table compares Kilroy Realty Corporation and Federal Realty Investment Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kilroy Realty Corporation $691.90 million 10.13 $400.80 million $1.52 46.86
Federal Realty Investment Trust $820.60 million 10.61 $526.36 million $3.45 34.93

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

Profitability

This table compares Kilroy Realty Corporation and Federal Realty Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kilroy Realty Corporation 23.77% 4.44% 2.45%
Federal Realty Investment Trust 30.40% 10.91% 4.05%

Summary

Federal Realty Investment Trust beats Kilroy Realty Corporation on 13 of the 17 factors compared between the two stocks.

About Kilroy Realty Corporation

Kilroy Realty Corporation is a real estate investment trust (REIT). The Company operates through the office properties segment. It operates in office and mixed-use submarkets along the West Coast. It owns, develops, acquires and manages real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area and Greater Seattle. It owns its interests in all of its real estate assets through Kilroy Realty, L.P. (Operating Partnership) and the Kilroy Realty Finance Partnership, L.P. (Finance Partnership). Its stabilized portfolio includes all of its properties with the exception of development and redevelopment properties under construction or committed for construction, lease-up properties, real estate assets held for sale and undeveloped land. As of December 31, 2016, its stabilized portfolio of operating properties included 108 stabilized office properties and a stabilized residential property.

About Federal Realty Investment Trust

Federal Realty Investment Trust is an equity real estate investment trust (REIT). The Company specializes in the ownership, management and redevelopment of retail and mixed-use properties located primarily in affluent communities in selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California and South Florida. As of December 31, 2016, the Company owned or had an interest in community and neighborhood shopping centers and mixed-use properties, which operated as 96 retail real estate projects and included approximately 22.6 million square feet. As of December 31, 2016, its 96 retail shopping center and mixed-use properties were located in 12 states and the District of Columbia. As of December 31, 2016, there were approximately 2,900 leases with tenants providing a range of retail products and services. These tenants range from sole proprietorships to national retailers, or corporate group of tenants.

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