American Assets Trust (NYSE:AAT) and Lexington Realty Trust (NYSE:LXP) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.
Dividends
American Assets Trust pays an annual dividend of $1.12 per share and has a dividend yield of 3.3%. Lexington Realty Trust pays an annual dividend of $0.43 per share and has a dividend yield of 3.7%. American Assets Trust pays out 50.9% of its earnings in the form of a dividend. Lexington Realty Trust pays out 53.8% 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. American Assets Trust has raised its dividend for 1 consecutive years and Lexington Realty Trust has raised its dividend for 1 consecutive years.
Risk & Volatility
American Assets Trust has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Lexington Realty Trust has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for American Assets Trust and Lexington Realty Trust, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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American Assets Trust | 0 | 1 | 1 | 0 | 2.50 |
Lexington Realty Trust | 0 | 0 | 2 | 0 | 3.00 |
American Assets Trust presently has a consensus target price of $30.75, indicating a potential downside of 8.48%. Lexington Realty Trust has a consensus target price of $12.25, indicating a potential upside of 5.24%. Given Lexington Realty Trust's stronger consensus rating and higher possible upside, analysts clearly believe Lexington Realty Trust is more favorable than American Assets Trust.
Institutional and Insider Ownership
94.1% of American Assets Trust shares are held by institutional investors. Comparatively, 90.4% of Lexington Realty Trust shares are held by institutional investors. 32.8% of American Assets Trust shares are held by company insiders. Comparatively, 2.1% of Lexington Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares American Assets Trust and Lexington Realty Trust's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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American Assets Trust | $366.74 million | 5.54 | $60.19 million | $2.20 | 15.27 |
Lexington Realty Trust | $325.97 million | 9.91 | $279.91 million | $0.80 | 14.55 |
Lexington Realty Trust has lower revenue, but higher earnings than American Assets Trust. Lexington Realty Trust is trading at a lower price-to-earnings ratio than American Assets Trust, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares American Assets Trust and Lexington Realty Trust's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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American Assets Trust | 10.38% | 2.94% | 1.34% |
Lexington Realty Trust | 49.72% | 9.57% | 4.87% |
Summary
Lexington Realty Trust beats American Assets Trust on 9 of the 16 factors compared between the two stocks.