Rexford Industrial Realty (NYSE: REXR) and EastGroup Properties (NYSE:EGP) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.
This is a summary of recent ratings and recommmendations for Rexford Industrial Realty and EastGroup Properties, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Rexford Industrial Realty||0||2||1||0||2.33|
Rexford Industrial Realty currently has a consensus target price of $23.75, suggesting a potential downside of 20.73%. EastGroup Properties has a consensus target price of $82.22, suggesting a potential downside of 9.36%. Given EastGroup Properties’ higher possible upside, analysts plainly believe EastGroup Properties is more favorable than Rexford Industrial Realty.
This table compares Rexford Industrial Realty and EastGroup Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Rexford Industrial Realty||25.38%||3.72%||2.15%|
Risk and Volatility
Rexford Industrial Realty has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, EastGroup Properties has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Rexford Industrial Realty pays an annual dividend of $0.58 per share and has a dividend yield of 1.9%. EastGroup Properties pays an annual dividend of $2.56 per share and has a dividend yield of 2.8%. Rexford Industrial Realty pays out 128.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EastGroup Properties pays out 108.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rexford Industrial Realty has increased its dividend for 5 consecutive years. EastGroup Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
98.8% of Rexford Industrial Realty shares are held by institutional investors. Comparatively, 96.4% of EastGroup Properties shares are held by institutional investors. 2.1% of Rexford Industrial Realty shares are held by company insiders. Comparatively, 2.9% of EastGroup Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Rexford Industrial Realty and EastGroup Properties’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Rexford Industrial Realty||$139.65 million||15.19||$82.43 million||$0.45||66.58|
|EastGroup Properties||$263.59 million||11.75||$161.56 million||$2.37||38.27|
EastGroup Properties has higher revenue and earnings than Rexford Industrial Realty. EastGroup Properties is trading at a lower price-to-earnings ratio than Rexford Industrial Realty, indicating that it is currently the more affordable of the two stocks.
EastGroup Properties beats Rexford Industrial Realty on 12 of the 17 factors compared between the two stocks.
Rexford Industrial Realty Company Profile
Rexford Industrial Realty, Inc. is a self-administered and self-managed full-service real estate investment trust (REIT). The Company is focused on owning, operating and acquiring industrial properties in Southern California infill markets. Rexford Industrial Realty, L.P. is the operating partnership of the Company. Through its controlling interest in Operating Partnership and its subsidiaries, the Company owns, manages, leases, acquires and develops industrial real estate located in Southern California infill markets, and from time to time, acquires or provides mortgage debt secured by industrial property. As of July 19, 2017, the Company’s consolidated portfolio consisted of 142 properties with approximately 17.7 million rentable square feet. In addition, the Company managed an additional 19 properties with approximately 1.2 million rentable square feet.
EastGroup Properties Company Profile
EastGroup Properties, Inc. is an equity real estate investment trust (REIT). The Company is focused on the development, acquisition and operation of industrial properties in various Sunbelt markets across the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company holds its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria. The Company may provide financing in connection with such sales of property if market conditions require. In addition, the Company may provide financing to a partner or co-owner in connection with an acquisition of real estate in certain situations. The Company owned 327 industrial properties and one office building as of December 31, 2016. The Company’s properties in North Carolina include Lindbergh Business Park, Nations Ford Business Park and Airport Commerce Center in Charlotte area.
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