Analyzing Alexandria Real Estate Equities (NYSE:ARE) and EastGroup Properties (NYSE:EGP)

EastGroup Properties (NYSE:EGP) and Alexandria Real Estate Equities (NYSE:ARE) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Dividends

EastGroup Properties pays an annual dividend of $6.20 per share and has a dividend yield of 3.0%. Alexandria Real Estate Equities pays an annual dividend of $2.88 per share and has a dividend yield of 6.2%. EastGroup Properties pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities pays out -45.9% of its earnings in the form of a dividend. EastGroup Properties has raised its dividend for 4 consecutive years and Alexandria Real Estate Equities has raised its dividend for 15 consecutive years. Alexandria Real Estate Equities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

92.1% of EastGroup Properties shares are owned by institutional investors. Comparatively, 96.5% of Alexandria Real Estate Equities shares are owned by institutional investors. 1.0% of EastGroup Properties shares are owned by insiders. Comparatively, 1.4% of Alexandria Real Estate Equities shares are owned 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 EastGroup Properties and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EastGroup Properties	39.69%	8.37%	5.45%
Alexandria Real Estate Equities	-36.03%	-5.21%	-2.96%

Valuation and Earnings

This table compares EastGroup Properties and Alexandria Real Estate Equities”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EastGroup Properties	$721.34 million	15.30	$257.40 million	$5.50	37.33
Alexandria Real Estate Equities	$3.03 billion	2.66	-$1.43 billion	($6.27)	-7.37

EastGroup Properties has higher earnings, but lower revenue than Alexandria Real Estate Equities. Alexandria Real Estate Equities is trading at a lower price-to-earnings ratio than EastGroup Properties, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for EastGroup Properties and Alexandria Real Estate Equities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EastGroup Properties	0	5	10	0	2.67
Alexandria Real Estate Equities	2	11	3	0	2.06

EastGroup Properties presently has a consensus target price of $205.33, indicating a potential downside of 0.00%. Alexandria Real Estate Equities has a consensus target price of $51.92, indicating a potential upside of 12.30%. Given Alexandria Real Estate Equities’ higher probable upside, analysts plainly believe Alexandria Real Estate Equities is more favorable than EastGroup Properties.

Volatility & Risk

EastGroup Properties has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Summary

EastGroup Properties beats Alexandria Real Estate Equities on 9 of the 17 factors compared between the two stocks.

About EastGroup Properties

EastGroup Properties, Inc. (NYSE: EGP), a member of the S&P Mid-Cap 400 and Russell 1000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. The Company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 59 million square feet.

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.