Vornado Realty Trust (NYSE:VNO) and PS Business Parks (NYSE:PSB) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.
Profitability
This table compares Vornado Realty Trust and PS Business Parks' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Vornado Realty Trust | 6.43% | 2.31% | 0.80% |
| PS Business Parks | 45.25% | 18.36% | 9.17% |
Earnings and Valuation
This table compares Vornado Realty Trust and PS Business Parks' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Vornado Realty Trust | $1.92 billion | 4.36 | $3.15 billion | $3.49 | 12.56 |
| PS Business Parks | $429.85 million | 9.13 | $174.97 million | $6.78 | 21.05 |
Vornado Realty Trust has higher revenue and earnings than PS Business Parks. Vornado 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 Recommendations
This is a breakdown of recent ratings for Vornado Realty Trust and PS Business Parks, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Vornado Realty Trust | 4 | 5 | 2 | 0 | 1.82 |
| PS Business Parks | 2 | 1 | 0 | 0 | 1.33 |
Vornado Realty Trust currently has a consensus target price of $38.50, indicating a potential downside of 12.92%. PS Business Parks has a consensus target price of $133.6667, indicating a potential downside of 6.22%. Given PS Business Parks' higher possible upside, analysts plainly believe PS Business Parks is more favorable than Vornado Realty Trust.
Institutional and Insider Ownership
73.7% of Vornado Realty Trust shares are owned by institutional investors. Comparatively, 69.9% of PS Business Parks shares are owned by institutional investors. 8.3% of Vornado 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Dividends
Vornado Realty Trust pays an annual dividend of $2.12 per share and has a dividend yield of 4.8%. PS Business Parks pays an annual dividend of $4.20 per share and has a dividend yield of 2.9%. Vornado Realty Trust pays out 60.7% 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. Vornado Realty Trust has increased its dividend for 1 consecutive years and PS Business Parks has increased its dividend for 1 consecutive years. Vornado Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Vornado Realty Trust has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.
Summary
Vornado Realty Trust beats PS Business Parks on 10 of the 16 factors compared between the two stocks.
