Alexandria Real Estate Equities (NYSE:ARE) and First Industrial Realty Trust (NYSE:FR) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.
Volatility & Risk
Alexandria Real Estate Equities has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, First Industrial Realty Trust has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Alexandria Real Estate Equities and First Industrial Realty Trust, as provided 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 |
First Industrial Realty Trust | 1 | 2 | 7 | 0 | 2.60 |
Alexandria Real Estate Equities presently has a consensus target price of $160.8750, indicating a potential upside of 1.59%. First Industrial Realty Trust has a consensus target price of $39.3571, indicating a potential downside of 8.19%. Given Alexandria Real Estate Equities' stronger consensus rating and higher probable upside, research analysts clearly believe Alexandria Real Estate Equities is more favorable than First Industrial Realty Trust.
Dividends
Alexandria Real Estate Equities pays an annual dividend of $4.36 per share and has a dividend yield of 2.8%. First Industrial Realty Trust pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Alexandria Real Estate Equities pays out 62.6% of its earnings in the form of a dividend. First Industrial Realty Trust pays out 57.5% 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 raised its dividend for 10 consecutive years and First Industrial Realty Trust has raised its dividend for 7 consecutive years. Alexandria Real Estate Equities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Alexandria Real Estate Equities and First Industrial 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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Alexandria Real Estate Equities | $1.53 billion | 14.14 | $363.17 million | $6.96 | 22.75 |
First Industrial Realty Trust | $425.98 million | 13.00 | $238.77 million | $1.74 | 24.64 |
Alexandria Real Estate Equities has higher revenue and earnings than First Industrial Realty Trust. Alexandria Real Estate Equities is trading at a lower price-to-earnings ratio than First Industrial Realty Trust, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Alexandria Real Estate Equities and First Industrial Realty Trust'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% |
First Industrial Realty Trust | 46.84% | 11.50% | 5.74% |
Insider and Institutional Ownership
87.6% of Alexandria Real Estate Equities shares are held by institutional investors. Comparatively, 96.9% of First Industrial Realty Trust shares are held by institutional investors. 1.1% of Alexandria Real Estate Equities shares are held by company insiders. Comparatively, 1.3% of First Industrial Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Alexandria Real Estate Equities beats First Industrial Realty Trust on 9 of the 17 factors compared between the two stocks.