Alexandria Real Estate Equities (NYSE:ARE) and Kilroy Realty (NYSE:KRC) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.
Risk & Volatility
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, Kilroy Realty has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings for Alexandria Real Estate Equities and Kilroy Realty, as reported by MarketBeat.
| 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 |
Kilroy Realty | 1 | 4 | 7 | 0 | 2.50 |
Alexandria Real Estate Equities presently has a consensus target price of $160.8750, suggesting a potential upside of 1.59%. Kilroy Realty has a consensus target price of $59.6364, suggesting a potential downside of 7.57%. Given Alexandria Real Estate Equities' stronger consensus rating and higher probable upside, analysts clearly believe Alexandria Real Estate Equities is more favorable than Kilroy Realty.
Valuation and Earnings
This table compares Alexandria Real Estate Equities and Kilroy Realty'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 |
Kilroy Realty | $837.45 million | 8.97 | $195.44 million | $3.91 | 16.50 |
Alexandria Real Estate Equities has higher revenue and earnings than Kilroy Realty. Kilroy Realty 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 Kilroy Realty'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% |
Kilroy Realty | 20.35% | 3.56% | 1.89% |
Dividends
Alexandria Real Estate Equities pays an annual dividend of $4.36 per share and has a dividend yield of 2.8%. Kilroy Realty pays an annual dividend of $2.00 per share and has a dividend yield of 3.1%. Alexandria Real Estate Equities pays out 62.6% of its earnings in the form of a dividend. Kilroy Realty pays out 51.2% 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 Kilroy Realty has increased its dividend for 5 consecutive years. Kilroy Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
87.6% of Alexandria Real Estate Equities shares are held by institutional investors. Comparatively, 94.7% of Kilroy Realty shares are held by institutional investors. 1.1% of Alexandria Real Estate Equities shares are held by insiders. Comparatively, 2.2% of Kilroy Realty shares are held by 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 Kilroy Realty on 10 of the 17 factors compared between the two stocks.