Alexandria Real Estate Equities (NYSE:ARE) and Boston Properties (NYSE:BXP) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.
Volatility and Risk
Alexandria Real Estate Equities has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Boston Properties has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Earnings & Valuation
This table compares Alexandria Real Estate Equities and Boston Properties' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Alexandria Real Estate Equities | $1.53 billion | 14.35 | $363.17 million | $6.96 | 23.10 |
Boston Properties | $2.96 billion | 5.28 | $521.53 million | $7.01 | 14.33 |
Boston Properties has higher revenue and earnings than Alexandria Real Estate Equities. Boston Properties 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.
Institutional and Insider Ownership
87.6% of Alexandria Real Estate Equities shares are held by institutional investors. Comparatively, 86.9% of Boston Properties shares are held by institutional investors. 1.1% of Alexandria Real Estate Equities shares are held by insiders. Comparatively, 1.0% of Boston Properties shares are held by 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.
Analyst Ratings
This is a breakdown of current ratings and target prices for Alexandria Real Estate Equities and Boston Properties, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Alexandria Real Estate Equities | 0 | 1 | 6 | 0 | 2.86 |
Boston Properties | 1 | 7 | 6 | 0 | 2.36 |
Alexandria Real Estate Equities currently has a consensus price target of $160.8750, indicating a potential downside of 0.51%. Boston Properties has a consensus price target of $99.4375, indicating a potential downside of 1.03%. Given Alexandria Real Estate Equities' stronger consensus rating and higher possible upside, equities research analysts plainly believe Alexandria Real Estate Equities is more favorable than Boston Properties.
Dividends
Alexandria Real Estate Equities pays an annual dividend of $4.36 per share and has a dividend yield of 2.7%. Boston Properties pays an annual dividend of $3.92 per share and has a dividend yield of 3.9%. Alexandria Real Estate Equities pays out 62.6% of its earnings in the form of a dividend. Boston Properties pays out 55.9% 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. Alexandria Real Estate Equities has increased its dividend for 10 consecutive years and Boston Properties has increased its dividend for 1 consecutive years. Boston Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Alexandria Real Estate Equities and Boston Properties' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Alexandria Real Estate Equities | 29.07% | 4.79% | 2.66% |
Boston Properties | 35.17% | 12.31% | 4.51% |
Summary
Boston Properties beats Alexandria Real Estate Equities on 9 of the 16 factors compared between the two stocks.