Lexington Realty Trust (NYSE:LXP) and PS Business Parks (NYSE:PSB) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.
Volatility & Risk
Lexington Realty Trust has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.
Profitability
This table compares Lexington Realty Trust and PS Business Parks' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Lexington Realty Trust | 49.72% | 9.57% | 4.87% |
PS Business Parks | 45.25% | 18.36% | 9.17% |
Institutional and Insider Ownership
90.4% of Lexington Realty Trust shares are owned by institutional investors. Comparatively, 69.9% of PS Business Parks shares are owned by institutional investors. 2.1% of Lexington Realty Trust shares are owned by insiders. Comparatively, 1.4% of PS Business Parks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Lexington Realty Trust and PS Business Parks' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Lexington Realty Trust | $325.97 million | 9.22 | $279.91 million | $0.80 | 13.54 |
PS Business Parks | $429.85 million | 9.40 | $174.97 million | $6.78 | 21.67 |
Lexington Realty Trust has higher earnings, but lower revenue than PS Business Parks. Lexington Realty Trust is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent recommendations for Lexington Realty Trust and PS Business Parks, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Lexington Realty Trust | 0 | 0 | 2 | 0 | 3.00 |
PS Business Parks | 2 | 1 | 0 | 0 | 1.33 |
Lexington Realty Trust presently has a consensus price target of $12.25, suggesting a potential upside of 13.11%. PS Business Parks has a consensus price target of $133.6667, suggesting a potential downside of 9.03%. Given Lexington Realty Trust's stronger consensus rating and higher probable upside, equities research analysts clearly believe Lexington Realty Trust is more favorable than PS Business Parks.
Dividends
Lexington Realty Trust pays an annual dividend of $0.43 per share and has a dividend yield of 4.0%. PS Business Parks pays an annual dividend of $4.20 per share and has a dividend yield of 2.9%. Lexington Realty Trust pays out 53.8% of its earnings in the form of a dividend. PS Business Parks pays out 61.9% 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. Lexington Realty Trust has increased its dividend for 1 consecutive years and PS Business Parks has increased its dividend for 1 consecutive years. Lexington Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Lexington Realty Trust beats PS Business Parks on 10 of the 16 factors compared between the two stocks.