Spirit Realty Capital (NYSE: SRC) and Piedmont Office Realty Trust (NYSE:PDM) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.
Insider and Institutional Ownership
92.0% of Spirit Realty Capital shares are held by institutional investors. Comparatively, 88.2% of Piedmont Office Realty Trust shares are held by institutional investors. 0.5% of Spirit Realty Capital shares are held by company insiders. Comparatively, 0.8% of Piedmont Office Realty Trust shares are held 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.
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%|
This is a summary of current recommendations for Spirit Realty Capital and Piedmont Office Realty Trust, as reported 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 presently has a consensus target price of $9.44, suggesting a potential upside of 18.26%. Piedmont Office Realty Trust has a consensus target price of $20.67, suggesting a potential upside of 19.05%. Given Piedmont Office Realty Trust’s higher possible upside, analysts plainly believe Piedmont Office Realty Trust is more favorable than Spirit Realty Capital.
Risk & Volatility
Spirit Realty Capital has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Piedmont Office Realty Trust has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.
Spirit Realty Capital pays an annual dividend of $0.72 per share and has a dividend yield of 9.0%. Piedmont Office Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 4.8%. 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 raised its dividend for 3 consecutive years and Piedmont Office Realty Trust has raised its dividend for 4 consecutive years.
Earnings and Valuation
This table compares Spirit Realty Capital and Piedmont Office Realty Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Spirit Realty Capital||$668.96 million||5.35||$77.14 million||$0.85||9.39|
|Piedmont Office Realty Trust||$574.17 million||4.08||$133.56 million||$1.75||9.92|
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.
Piedmont Office Realty Trust beats Spirit Realty Capital on 9 of the 17 factors compared between the two stocks.
About Spirit Realty Capital
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.
About Piedmont Office Realty Trust
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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