Critical Comparison: Alexander’s (NYSE:ALX) & Alexander & Baldwin (NYSE:ALEX)

Alexander’s (NYSE:ALX) and Alexander & Baldwin (NYSE:ALEX) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Profitability

This table compares Alexander’s and Alexander & Baldwin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alexander’s	17.14%	22.12%	2.79%
Alexander & Baldwin	33.94%	7.81%	4.75%

Risk & Volatility

Alexander’s has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Alexander & Baldwin has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Alexander’s and Alexander & Baldwin, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander’s	0	2	0	0	2.00
Alexander & Baldwin	0	2	1	0	2.33

Alexander & Baldwin has a consensus target price of $24.00, suggesting a potential upside of 44.01%. Given Alexander & Baldwin’s stronger consensus rating and higher probable upside, analysts plainly believe Alexander & Baldwin is more favorable than Alexander’s.

Valuation and Earnings

This table compares Alexander’s and Alexander & Baldwin”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander’s	$226.37 million	4.92	$43.44 million	$7.28	29.96
Alexander & Baldwin	$236.67 million	5.12	$60.54 million	$1.07	15.57

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

Dividends

Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 8.3%. Alexander & Baldwin pays an annual dividend of $0.90 per share and has a dividend yield of 5.4%. Alexander’s pays out 247.3% 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 & Baldwin pays out 84.1% 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 raised its dividend for 1 consecutive years and Alexander & Baldwin has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

32.0% of Alexander’s shares are owned by institutional investors. Comparatively, 91.3% of Alexander & Baldwin shares are owned by institutional investors. 26.3% of Alexander’s shares are owned by company insiders. Comparatively, 0.7% of Alexander & Baldwin shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Alexander & Baldwin beats Alexander’s on 12 of the 17 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 Alexander & Baldwin

Alexander & Baldwin, Inc. engages in the real estate business. It operates through the Commercial Real Estate and Land Operations segments. The Commercial Real Estate segment includes investments and acquisitions, construction and development, and in-house leasing and property management. The Land Operations segment consists of legacy landholdings, assets, and liabilities subject to the company’s simplification and monetization effort. The company was founded by Samuel Thomas Alexander and Henry Perrine Baldwin in 1870 and is headquartered in Honolulu, HI.