Reviewing Columbia Property Trust (CXP) & Alexandria Real Estate Equities (ARE)

Columbia Property Trust (NYSE: CXP) and Alexandria Real Estate Equities (NYSE:ARE) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Dividends

Columbia Property Trust pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. Alexandria Real Estate Equities pays an annual dividend of $3.44 per share and has a dividend yield of 2.9%. Columbia Property Trust pays out 70.2% of its earnings in the form of a dividend. 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. Columbia Property Trust has raised its dividend for 6 consecutive years. Columbia Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Columbia Property Trust has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Profitability

This table compares Columbia Property Trust and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Property Trust 37.27% 5.55% 3.30%
Alexandria Real Estate Equities 9.45% 3.11% 1.49%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Columbia Property Trust and Alexandria Real Estate Equities, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Property Trust 0 3 4 0 2.57
Alexandria Real Estate Equities 0 0 3 0 3.00

Columbia Property Trust presently has a consensus target price of $23.80, indicating a potential upside of 11.40%. Alexandria Real Estate Equities has a consensus target price of $126.00, indicating a potential upside of 6.73%. Given Columbia Property Trust’s higher possible upside, equities analysts plainly believe Columbia Property Trust is more favorable than Alexandria Real Estate Equities.

Institutional & Insider Ownership

64.8% of Columbia Property Trust shares are owned by institutional investors. 0.5% of Columbia Property Trust shares are owned by company insiders. Comparatively, 1.5% of Alexandria Real Estate Equities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Columbia Property Trust and Alexandria Real Estate Equities’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Columbia Property Trust $376.05 million 6.89 $171.48 million $1.14 18.74
Alexandria Real Estate Equities $1.02 billion 10.84 $639.55 million $0.40 295.16

Alexandria Real Estate Equities has higher revenue and earnings than Columbia Property Trust. Columbia Property Trust 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.

Summary

Columbia Property Trust beats Alexandria Real Estate Equities on 11 of the 17 factors compared between the two stocks.

Columbia Property Trust Company Profile

Columbia Property Trust, Inc. operates as a real estate investment trust (REIT), which owns and operates commercial real estate properties. The Company’s primary objective is to generate long-term shareholder returns from a combination of steadily growing cash flows and appreciation in its net asset values, through the acquisition and ownership of office buildings located principally in high-barrier-to-entry markets. The Company’s segments include New York, San Francisco, Atlanta, Washington, D.C., Boston, Los Angeles and all other office markets. The all other office markets segment consists of properties in similar, low-barrier to entry geographic locations, in which the Company does not plan to make further investments. The Company conducts its business primarily through Columbia Property Trust Operating Partnership, L.P. (Columbia Property Trust OP), which acquires, develops, owns, leases and operates real properties directly through subsidiaries or through joint ventures.

Alexandria Real Estate Equities Company Profile

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.




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