Head-To-Head Analysis: Alexandria Real Estate Equities (ARE) and Kilroy Realty Corporation (KRC)

Alexandria Real Estate Equities (NYSE: ARE) and Kilroy Realty Corporation (NYSE:KRC) 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, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Dividends

Alexandria Real Estate Equities pays an annual dividend of $3.44 per share and has a dividend yield of 2.8%. Kilroy Realty Corporation pays an annual dividend of $1.70 per share and has a dividend yield of 2.4%. Alexandria Real Estate Equities pays out 860.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kilroy Realty Corporation pays out 122.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities has increased its dividend for 6 consecutive years. Alexandria Real Estate Equities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Alexandria Real Estate Equities and Kilroy Realty Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alexandria Real Estate Equities 0 0 4 0 3.00
Kilroy Realty Corporation 0 3 6 0 2.67

Alexandria Real Estate Equities presently has a consensus target price of $125.50, indicating a potential upside of 3.76%. Kilroy Realty Corporation has a consensus target price of $79.00, indicating a potential upside of 13.70%. Given Kilroy Realty Corporation’s higher possible upside, analysts clearly believe Kilroy Realty Corporation is more favorable than Alexandria Real Estate Equities.

Volatility and Risk

Alexandria Real Estate Equities has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Kilroy Realty Corporation has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Earnings and Valuation

This table compares Alexandria Real Estate Equities and Kilroy Realty Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alexandria Real Estate Equities $1.02 billion 11.10 $639.55 million $0.40 302.38
Kilroy Realty Corporation $691.90 million 9.88 $400.80 million $1.39 49.99

Alexandria Real Estate Equities has higher revenue and earnings than Kilroy Realty Corporation. Kilroy Realty Corporation is trading at a lower price-to-earnings ratio than Alexandria Real Estate Equities, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Alexandria Real Estate Equities and Kilroy Realty Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alexandria Real Estate Equities 9.45% 3.11% 1.49%
Kilroy Realty Corporation 21.75% 4.11% 2.24%

Insider & Institutional Ownership

99.7% of Kilroy Realty Corporation shares are held by institutional investors. 1.5% of Alexandria Real Estate Equities shares are held by company insiders. Comparatively, 2.3% of Kilroy Realty Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Kilroy Realty Corporation beats Alexandria Real Estate Equities on 9 of the 17 factors compared between the two stocks.

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. is a real estate investment (REIT). The Company is engaged in the business of providing space for lease to the life science and technology industries. It focuses on collaborative life science and technology campuses. It develops urban cluster campuses and ecosystems. As of December 31, 2016, the Company had 199 properties in North America. As of December 31, 2016, its asset base in North America consisted of 25.2 million square feet, including 19.9 million rentable square feet/foot (RSF) of operating properties, and development and redevelopment of under construction or pre-construction, as well as 5.3 million square feet of future ground-up development projects. Its properties are located in various areas, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle Park. Its properties include Alexandria Technology Square, Alexandria Park at 128 and Alexandria Technology Center-Gateway.

About Kilroy Realty Corporation

Kilroy Realty Corporation is a real estate investment trust (REIT). The Company operates through the office properties segment. It operates in office and mixed-use submarkets along the West Coast. It owns, develops, acquires and manages real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area and Greater Seattle. It owns its interests in all of its real estate assets through Kilroy Realty, L.P. (Operating Partnership) and the Kilroy Realty Finance Partnership, L.P. (Finance Partnership). Its stabilized portfolio includes all of its properties with the exception of development and redevelopment properties under construction or committed for construction, lease-up properties, real estate assets held for sale and undeveloped land. As of December 31, 2016, its stabilized portfolio of operating properties included 108 stabilized office properties and a stabilized residential property.




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