Alexandria Real Estate Equities (NYSE:ARE) and Douglas Emmett (NYSE:DEI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.
Earnings & Valuation
This table compares Alexandria Real Estate Equities and Douglas Emmett's top-line 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 | 14.36 | $363.17 million | $6.96 | 23.11 |
Douglas Emmett | $936.68 million | 6.13 | $363.71 million | $2.10 | 15.59 |
Douglas Emmett has lower revenue, but higher earnings than Alexandria Real Estate Equities. Douglas Emmett 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 Douglas Emmett's 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% |
Douglas Emmett | 34.90% | 7.53% | 3.35% |
Dividends
Alexandria Real Estate Equities pays an annual dividend of $4.36 per share and has a dividend yield of 2.7%. Douglas Emmett pays an annual dividend of $1.12 per share and has a dividend yield of 3.4%. Alexandria Real Estate Equities pays out 62.6% of its earnings in the form of a dividend. Douglas Emmett pays out 53.3% 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 Douglas Emmett has increased its dividend for 1 consecutive years. Douglas Emmett is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
87.6% of Alexandria Real Estate Equities shares are held by institutional investors. Comparatively, 96.7% of Douglas Emmett shares are held by institutional investors. 1.1% of Alexandria Real Estate Equities shares are held by company insiders. Comparatively, 15.9% of Douglas Emmett shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Alexandria Real Estate Equities has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and target prices for Alexandria Real Estate Equities and Douglas Emmett, 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 |
Douglas Emmett | 0 | 9 | 3 | 0 | 2.25 |
Alexandria Real Estate Equities currently has a consensus target price of $160.8750, suggesting a potential upside of 0.02%. Douglas Emmett has a consensus target price of $32.6667, suggesting a potential downside of 0.22%. Given Alexandria Real Estate Equities' stronger consensus rating and higher possible upside, equities analysts clearly believe Alexandria Real Estate Equities is more favorable than Douglas Emmett.
Summary
Douglas Emmett beats Alexandria Real Estate Equities on 9 of the 17 factors compared between the two stocks.