Brandywine Realty Trust (BDN) & Paramount Group (PGRE) Head to Head Review

Brandywine Realty Trust (NYSE: BDN) and Paramount Group (NYSE:PGRE) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Profitability

This table compares Brandywine Realty Trust and Paramount Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brandywine Realty Trust 4.67% 1.48% 0.68%
Paramount Group 13.88% 1.99% 1.12%

Volatility and Risk

Brandywine Realty Trust has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Paramount Group has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Dividends

Brandywine Realty Trust pays an annual dividend of $0.64 per share and has a dividend yield of 3.8%. Paramount Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.3%. Brandywine Realty Trust pays out 800.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Paramount Group pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Paramount Group has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares Brandywine Realty Trust and Paramount Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brandywine Realty Trust $512.29 million 5.80 $227.17 million $0.08 212.90
Paramount Group $708.66 million 5.47 $384.89 million $0.41 39.59

Paramount Group has higher revenue and earnings than Brandywine Realty Trust. Paramount Group is trading at a lower price-to-earnings ratio than Brandywine Realty Trust, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

98.7% of Brandywine Realty Trust shares are held by institutional investors. Comparatively, 62.6% of Paramount Group shares are held by institutional investors. 1.8% of Brandywine Realty Trust shares are held by company insiders. Comparatively, 5.9% of Paramount Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Brandywine Realty Trust and Paramount Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brandywine Realty Trust 1 3 4 0 2.38
Paramount Group 2 1 1 0 1.75

Brandywine Realty Trust presently has a consensus price target of $17.50, indicating a potential upside of 2.76%. Paramount Group has a consensus price target of $15.50, indicating a potential downside of 4.50%. Given Brandywine Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Brandywine Realty Trust is more favorable than Paramount Group.

Summary

Paramount Group beats Brandywine Realty Trust on 10 of the 17 factors compared between the two stocks.

About Brandywine Realty Trust

Brandywine Realty Trust is a self-administered and self-managed real estate investment trust (REIT). The Company operates through five segments: Pennsylvania Suburbs, Philadelphia Central Business District (CBD), Metropolitan Washington, D.C., Austin, Texas, and Other. The Pennsylvania Suburbs segment includes properties in Chester, Delaware and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in the District of Columbia, Northern Virginia and Southern Maryland. The Austin, Texas segment includes properties in the City of Austin, Texas. The Other segment includes properties in Burlington and Camden counties in New Jersey, New Castle County in the state of Delaware and the City of Concord in California. As of December 31, 2016, the Company owned 113 properties that had approximately 17.6 million net rentable square feet.

About Paramount Group

Paramount Group, Inc. is a fully-integrated real estate investment trust (REIT) focused on owning, operating, managing, acquiring and redeveloping Class A office properties in select central business district submarkets of New York City, Washington, District of Columbia (D.C.) and San Francisco. The Company conducts its business through, and substantially all its interests in properties and investments are held by, Paramount Group Operating Partnership LP (the Operating Partnership). The Company’s segments include New York, Washington, D.C. and San Francisco. As of December 31, 2016, the Company’s portfolio consisted of 13 Class A office properties aggregating approximately 10.8 million square feet that was 93.3% leased and 90.9% occupied. The Company also has an investment management business, where it serves as the general partner and property manager of certain private equity real estate funds for institutional investors and high-net-worth individuals.

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