American Assets Trust (NYSE:AAT) versus Alexander’s (NYSE:ALX) Head to Head Review

Alexander’s (NYSE:ALX) and American Assets Trust (NYSE:AAT) are both small-cap real estate companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Dividends

Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 6.6%. American Assets Trust pays an annual dividend of $1.36 per share and has a dividend yield of 5.9%. Alexander’s pays out 54.5% of its earnings in the form of a dividend. American Assets Trust pays out 469.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander’s has increased its dividend for 1 consecutive years and American Assets Trust has increased its dividend for 4 consecutive years. Alexander’s is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Alexander’s and American Assets Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander’s	1	0	1	1	2.67
American Assets Trust	1	2	0	0	1.67

Alexander’s presently has a consensus price target of $212.00, suggesting a potential downside of 22.56%. American Assets Trust has a consensus price target of $21.50, suggesting a potential downside of 5.95%. Given American Assets Trust’s higher probable upside, analysts plainly believe American Assets Trust is more favorable than Alexander’s.

Valuation and Earnings

This table compares Alexander’s and American Assets Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander’s	$213.18 million	6.56	$28.22 million	$33.05	8.28
American Assets Trust	$436.20 million	3.22	$71.37 million	$0.29	78.83

American Assets Trust has higher revenue and earnings than Alexander’s. Alexander’s is trading at a lower price-to-earnings ratio than American Assets Trust, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

32.0% of Alexander’s shares are owned by institutional investors. Comparatively, 90.4% of American Assets Trust shares are owned by institutional investors. 26.4% of Alexander’s shares are owned by company insiders. Comparatively, 37.9% of American Assets Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Alexander’s and American Assets Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alexander’s	79.06%	123.09%	14.43%
American Assets Trust	4.09%	1.66%	0.62%

Volatility & Risk

Alexander’s has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, American Assets Trust has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Summary

Alexander’s beats American Assets Trust on 10 of the 18 factors compared between the two stocks.

About Alexander’s

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.

About American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.