Financial Contrast: CoreSite Realty Corporation (COR) versus Pennsylvania Real Estate Investment Trust (PEI)

CoreSite Realty Corporation (NYSE: COR) and Pennsylvania Real Estate Investment Trust (NYSE:PEI) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Dividends

CoreSite Realty Corporation pays an annual dividend of $3.60 per share and has a dividend yield of 3.3%. Pennsylvania Real Estate Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 8.5%. CoreSite Realty Corporation pays out 206.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennsylvania Real Estate Investment Trust pays out -64.1% of its earnings in the form of a dividend. CoreSite Realty Corporation has raised its dividend for 6 consecutive years and Pennsylvania Real Estate Investment Trust has raised its dividend for 5 consecutive years. Pennsylvania Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for CoreSite Realty Corporation and Pennsylvania Real Estate Investment Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CoreSite Realty Corporation 0 8 3 0 2.27
Pennsylvania Real Estate Investment Trust 1 6 0 0 1.86

CoreSite Realty Corporation presently has a consensus price target of $95.11, indicating a potential downside of 13.86%. Pennsylvania Real Estate Investment Trust has a consensus price target of $14.08, indicating a potential upside of 41.97%. Given Pennsylvania Real Estate Investment Trust’s higher possible upside, analysts clearly believe Pennsylvania Real Estate Investment Trust is more favorable than CoreSite Realty Corporation.

Volatility & Risk

CoreSite Realty Corporation has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Pennsylvania Real Estate Investment Trust has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Profitability

This table compares CoreSite Realty Corporation and Pennsylvania Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CoreSite Realty Corporation 15.15% 14.14% 4.69%
Pennsylvania Real Estate Investment Trust -18.13% -9.06% -2.66%

Earnings and Valuation

This table compares CoreSite Realty Corporation and Pennsylvania Real Estate Investment Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CoreSite Realty Corporation $444.59 million 8.50 $232.47 million $1.74 63.46
Pennsylvania Real Estate Investment Trust $392.34 million 1.77 $217.76 million ($1.31) -7.57

CoreSite Realty Corporation has higher revenue and earnings than Pennsylvania Real Estate Investment Trust. Pennsylvania Real Estate Investment Trust is trading at a lower price-to-earnings ratio than CoreSite Realty Corporation, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

98.3% of CoreSite Realty Corporation shares are owned by institutional investors. Comparatively, 99.0% of Pennsylvania Real Estate Investment Trust shares are owned by institutional investors. 1.5% of CoreSite Realty Corporation shares are owned by insiders. Comparatively, 4.4% of Pennsylvania Real Estate Investment Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

CoreSite Realty Corporation beats Pennsylvania Real Estate Investment Trust on 10 of the 16 factors compared between the two stocks.

About CoreSite Realty Corporation

CoreSite Realty Corporation (CoreSite) is an integrated, self-administered and self-managed real estate investment trust. The Company, through its controlling interest in CoreSite, L.P., is engaged in the business of ownership, acquisition, construction and operation of data centers across a range of markets in the United States, including the Northern Virginia, New York and San Francisco Bay areas, Chicago, Los Angeles, Boston, Miami and Denver. The enterprises, network operators, cloud providers and supporting service providers choose CoreSite to connect and protect their data, applications and computing workloads. Its offerings include the CoreSite Open Cloud Exchange and the Any2 Internet Exchange. As of December 31, 2016, it had offered cloud-enabled, network data center campuses with over 20,000 interconnections across its portfolio and direct access to carriers and Internet service providers, cloud and information technology service providers, and inter site connectivity.

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust (PREIT) is a self-managed and self-administered real estate investment trust (REIT). The Company’s primary business is owning and operating retail shopping malls, which it does primarily through operating partnership, PREIT Associates, L.P. (PREIT Associates). The Company is engaged in the ownership, management, leasing, acquisition, redevelopment, development and disposition of shopping malls. The Company has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. As of December 31, 2016, the Company owned interests in 30 retail properties, of which 26 are operating properties and four are development or redevelopment properties. As of December 31, 2016, the Company’s 26 operating properties included 22 shopping malls and four other retail properties, had a total of 21.7 million square feet and were located in nine states.

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