Piedmont Office Realty Trust (NYSE:PDM) and IRSA Propiedades Comerciales (NASDAQ:IRCP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.
Risk & Volatility
Piedmont Office Realty Trust has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, IRSA Propiedades Comerciales has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500.
This table compares Piedmont Office Realty Trust and IRSA Propiedades Comerciales’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Piedmont Office Realty Trust||30.50%||2.81%||1.41%|
|IRSA Propiedades Comerciales||333.56%||52.00%||29.72%|
Insider and Institutional Ownership
86.6% of Piedmont Office Realty Trust shares are held by institutional investors. Comparatively, 6.7% of IRSA Propiedades Comerciales shares are held by institutional investors. 0.9% of Piedmont Office Realty Trust shares are held by 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.
Earnings and Valuation
This table compares Piedmont Office Realty Trust and IRSA Propiedades Comerciales’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Piedmont Office Realty Trust||$574.17 million||4.07||$133.56 million||$1.75||10.41|
|IRSA Propiedades Comerciales||$183.91 million||4.19||$774.62 million||$20.83||1.17|
IRSA Propiedades Comerciales has lower revenue, but higher earnings than Piedmont Office Realty Trust. IRSA Propiedades Comerciales 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 Piedmont Office Realty Trust and IRSA Propiedades Comerciales, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Piedmont Office Realty Trust||1||1||2||0||2.25|
|IRSA Propiedades Comerciales||0||1||1||0||2.50|
Piedmont Office Realty Trust presently has a consensus target price of $21.25, suggesting a potential upside of 16.63%. IRSA Propiedades Comerciales has a consensus target price of $34.00, suggesting a potential upside of 39.06%. Given IRSA Propiedades Comerciales’ stronger consensus rating and higher probable upside, analysts clearly believe IRSA Propiedades Comerciales is more favorable than Piedmont Office Realty Trust.
Piedmont Office Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%. IRSA Propiedades Comerciales pays an annual dividend of $1.21 per share and has a dividend yield of 4.9%. Piedmont Office Realty Trust pays out 48.0% of its earnings in the form of a dividend. IRSA Propiedades Comerciales pays out 5.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Piedmont Office Realty Trust has increased its dividend for 4 consecutive years. IRSA Propiedades Comerciales is clearly the better dividend stock, given its higher yield and lower payout ratio.
IRSA Propiedades Comerciales beats Piedmont Office Realty Trust on 10 of the 17 factors compared between the two stocks.
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 sub-markets 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).
About IRSA Propiedades Comerciales
IRSA Propiedades Comerciales S.A. operates as an investment arm of IRSA Inversiones y Representaciones S.A. Alto Palermo S.A. engages in the ownership, acquisition, development, leasing, management, and operation of shopping centers, as well as residential and commercial complexes in Argentina. As of June 30, 2007, it owned and operated ten shopping centers covering a total of 264,995 square meters in Argentina, including six in the Buenos Aires metropolitan area and four in the provinces of Cordoba, Mendoza, Salta, and Santa Fe; and a condominium called Torres de Abasto located in front of the Abasto Shopping Center in Buenos Aires. The company offers leases to retail tenants in its ten shopping centers; administration and maintenance of common areas; administration of contributions made by tenants to finance promotional efforts for the shopping centers; and parking lot services for visitors. The company also offers credit card consumer finance service, through the issuance of its Tarjeta Shopping and Tarjeta Shopping Metroshop credit cards, for consumers at shopping centers, hypermarkets, and street stores. It also engages in the development and sale of residential properties, and acquisition and sale of undeveloped parcels of land for future development. In addition, it engages in the development of condominiums associated with its shopping centers. The company was founded in 1889 and is headquartered in Buenos Aires, Argentina.
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