Critical Analysis: Prologis (PLD) & Granite Real Estate Investment Trust (GRP)

Prologis (NYSE: PLD) and Granite Real Estate Investment Trust (NYSE:GRP) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Institutional & Insider Ownership

95.6% of Prologis shares are owned by institutional investors. 1.3% of Prologis shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Prologis and Granite Real Estate Investment Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Prologis $2.53 billion 13.86 $1.21 billion $3.33 19.81
Granite Real Estate Investment Trust N/A N/A N/A $1.29 30.64

Prologis has higher revenue and earnings than Granite Real Estate Investment Trust. Prologis is trading at a lower price-to-earnings ratio than Granite Real Estate Investment Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Prologis pays an annual dividend of $1.76 per share and has a dividend yield of 2.7%. Granite Real Estate Investment Trust does not pay a dividend. Prologis pays out 52.9% of its earnings in the form of a dividend. Prologis has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of current recommendations for Prologis and Granite Real Estate Investment Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prologis 0 4 9 0 2.69
Granite Real Estate Investment Trust 0 2 0 0 2.00

Prologis currently has a consensus target price of $65.92, indicating a potential downside of 0.09%. Given Prologis’ stronger consensus rating and higher possible upside, equities analysts clearly believe Prologis is more favorable than Granite Real Estate Investment Trust.

Profitability

This table compares Prologis and Granite Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prologis 68.50% 9.93% 5.99%
Granite Real Estate Investment Trust N/A N/A N/A

Risk and Volatility

Prologis has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Granite Real Estate Investment Trust has a beta of 1.99, suggesting that its stock price is 99% more volatile than the S&P 500.

Summary

Prologis beats Granite Real Estate Investment Trust on 12 of the 14 factors compared between the two stocks.

About Prologis

Prologis, Inc. is a real estate investment trust (REIT) company. The Company is engaged in logistics real estate business. The Company’s segments include Real Estate Operations and Strategic Capital. The Real estate operations segment consists of rental operations and development. The Company’s strategic capital segment includes asset management services, as well as services performed for unconsolidated co-investment ventures. Its strategic capital segment gives the Company access to third-party capital, both private and public. As of December 31, 2016, the Company owned or had investments in, on an owned basis or through co-investment ventures, properties and development projects across 676 million square feet (63 million square meters) in 20 countries spanning four continents.

About Granite Real Estate Investment Trust

Granite Real Estate Investment Trust is a real estate investment trust (REIT). It is engaged principally in the acquisition, development, construction, leasing, management and ownership of an industrial global rental portfolio of properties in North America and Europe leased primarily to Magna International Inc. and its automotive operating units. It is a service REIT with an international portfolio consisting of over 100 properties. It provides a range of services that includes sourcing and real estate acquisition, site development, assisting with government approvals and re-zoning to specific uses, build-to-suit construction, property renovation, project management and long-term leasing. In November 2013, Granite Real Estate Investment Trust completed its acquisition of a 2.5 million square foot portfolio of seven properties located in Germany and the Netherlands from funds managed by AEW Europe.

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