Analyzing Brandywine Realty Trust (BDN) & NorthStar Realty Europe Corp. (NRE)

Brandywine Realty Trust (NYSE: BDN) and NorthStar Realty Europe Corp. (NYSE:NRE) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, earnings, profitability and institutional ownership.

Risk and Volatility

Brandywine Realty Trust has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, NorthStar Realty Europe Corp. has a beta of 2.5, meaning that its share price is 150% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Brandywine Realty Trust and NorthStar Realty Europe Corp., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brandywine Realty Trust 1 3 5 0 2.44
NorthStar Realty Europe Corp. 0 0 3 0 3.00

Brandywine Realty Trust presently has a consensus target price of $17.58, suggesting a potential upside of 0.71%. NorthStar Realty Europe Corp. has a consensus target price of $16.83, suggesting a potential upside of 17.22%. Given NorthStar Realty Europe Corp.’s stronger consensus rating and higher probable upside, analysts clearly believe NorthStar Realty Europe Corp. is more favorable than Brandywine Realty Trust.

Valuation and Earnings

This table compares Brandywine Realty Trust and NorthStar Realty Europe Corp.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Brandywine Realty Trust $525.46 million 5.83 $40.19 million $0.16 109.13
NorthStar Realty Europe Corp. $151.21 million 5.26 -$61.75 million ($0.35) -41.03

Brandywine Realty Trust has higher revenue and earnings than NorthStar Realty Europe Corp.. NorthStar Realty Europe Corp. is trading at a lower price-to-earnings ratio than Brandywine Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Brandywine Realty Trust pays an annual dividend of $0.64 per share and has a dividend yield of 3.7%. NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.2%. Brandywine Realty Trust pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NorthStar Realty Europe Corp. pays out -171.4% of its earnings in the form of a dividend. Brandywine Realty Trust has raised its dividend for 2 consecutive years. NorthStar Realty Europe Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

71.8% of NorthStar Realty Europe Corp. shares are held by institutional investors. 1.8% of Brandywine Realty Trust shares are held by insiders. Comparatively, 2.2% of NorthStar Realty Europe Corp. shares are held by 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.

Profitability

This table compares Brandywine Realty Trust and NorthStar Realty Europe Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brandywine Realty Trust 6.81% 2.12% 0.97%
NorthStar Realty Europe Corp. -14.48% 7.68% 2.43%

Summary

NorthStar Realty Europe Corp. beats Brandywine Realty Trust on 9 of the 16 factors compared between the two stocks.

Brandywine Realty Trust Company Profile

Brandywine Realty Trust is a self-administered and self-managed real estate investment trust (REIT). The Company operates through five segments: Pennsylvania Suburbs, Philadelphia Central Business District (CBD), Metropolitan Washington, D.C., Austin, Texas, and Other. The Pennsylvania Suburbs segment includes properties in Chester, Delaware and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in the District of Columbia, Northern Virginia and Southern Maryland. The Austin, Texas segment includes properties in the City of Austin, Texas. The Other segment includes properties in Burlington and Camden counties in New Jersey, New Castle County in the state of Delaware and the City of Concord in California. As of December 31, 2016, the Company owned 113 properties that had approximately 17.6 million net rentable square feet.

NorthStar Realty Europe Corp. Company Profile

NorthStar Realty Europe Corp. is a real estate investment trust (REIT). The Company is a European focused commercial real estate company with primary office properties in cities within Germany, the United Kingdom and France. Its objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time. The Company conducts its business through two segments: Real Estate and Corporate. Its European commercial real estate business is primarily focused on office properties. Its portfolio consists of approximately 48 properties and a total of approximately 495,588 square meters of rentable space, located in various European markets, including Frankfurt, Hamburg, Berlin, London, Paris, Amsterdam, Milan, Brussels and Madrid. Its overall portfolio is over 87% occupied. In addition, it owns over two hotels, which are leased to third-party operators. It is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NSAM).

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