Spirit Realty Capital (NYSE: SRC) and Piedmont Office Realty Trust (NYSE:PDM) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.
Risk and Volatility
Spirit Realty Capital has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Piedmont Office Realty Trust has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.
Insider and Institutional Ownership
92.1% of Spirit Realty Capital shares are owned by institutional investors. Comparatively, 88.2% of Piedmont Office Realty Trust shares are owned by institutional investors. 0.5% of Spirit Realty Capital shares are owned by company insiders. Comparatively, 0.9% of Piedmont Office Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Spirit Realty Capital and Piedmont Office Realty Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Spirit Realty Capital||$668.96 million||5.41||$77.14 million||$0.85||9.48|
|Piedmont Office Realty Trust||$574.17 million||4.17||$133.56 million||$1.75||10.14|
Piedmont Office Realty Trust has lower revenue, but higher earnings than Spirit Realty Capital. Spirit Realty Capital is trading at a lower price-to-earnings ratio than Piedmont Office Realty Trust, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations and price targets for Spirit Realty Capital and Piedmont Office Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Spirit Realty Capital||0||10||5||0||2.33|
|Piedmont Office Realty Trust||1||1||1||0||2.00|
Spirit Realty Capital currently has a consensus price target of $9.44, indicating a potential upside of 17.09%. Piedmont Office Realty Trust has a consensus price target of $20.67, indicating a potential upside of 16.50%. Given Spirit Realty Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Spirit Realty Capital is more favorable than Piedmont Office Realty Trust.
This table compares Spirit Realty Capital and Piedmont Office Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Spirit Realty Capital||11.53%||2.84%||1.27%|
|Piedmont Office Realty Trust||23.26%||1.16%||0.58%|
Spirit Realty Capital pays an annual dividend of $0.72 per share and has a dividend yield of 8.9%. Piedmont Office Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 4.7%. Spirit Realty Capital pays out 84.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Piedmont Office Realty Trust pays out 48.0% of its earnings in the form of a dividend. Spirit Realty Capital has increased its dividend for 3 consecutive years and Piedmont Office Realty Trust has increased its dividend for 4 consecutive years.
Spirit Realty Capital beats Piedmont Office Realty Trust on 9 of the 17 factors compared between the two stocks.
Spirit Realty Capital Company Profile
Spirit Realty Capital, Inc. (NYSE:SRC) is a premier net lease real estate investment trust (REIT) that primarily invests in high-quality, operationally essential retail real estate, subject to long-term, net leases. Over the past decade, Spirit has become an industry leader and owner of income-producing, strategically located retail, industrial and office properties providing superior risk adjusted returns and steady dividend growth for our shareholders.
Piedmont Office Realty Trust Company Profile
Piedmont Office Realty Trust, Inc. (NYSE: PDM) is an owner, manager, developer, and operator of high-quality, Class A office properties in select submarkets located primarily within eight major U.S. office markets. Its geographically-diversified, almost $5 billion portfolio is currently comprised of approximately 17 million square feet. The Company is a fully-integrated, self-managed real estate investment trust (REIT) with local management offices in each of its major markets and is investment-grade rated by Standard & Poor's (BBB) and Moody's (Baa2). For more information, see www.piedmontreit.com.
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