Head-To-Head Analysis: Easterly Government Properties (NYSE:DEA) & Northstar Realty Europe (NYSE:NRE)

Easterly Government Properties (NYSE:DEA) and Northstar Realty Europe (NYSE:NRE) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Dividends

Easterly Government Properties pays an annual dividend of $1.04 per share and has a dividend yield of 5.6%. Northstar Realty Europe pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. Easterly Government Properties pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Easterly Government Properties has raised its dividend for 3 consecutive years. Easterly Government Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Easterly Government Properties and Northstar Realty Europe’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Easterly Government Properties 2.15% 0.35% 0.21%
Northstar Realty Europe 202.58% 6.78% 2.66%

Valuation and Earnings

This table compares Easterly Government Properties and Northstar Realty Europe’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Easterly Government Properties $160.59 million 7.86 $5.70 million $1.17 15.85
Northstar Realty Europe $121.97 million 7.01 $207.41 million N/A N/A

Northstar Realty Europe has lower revenue, but higher earnings than Easterly Government Properties.

Analyst Ratings

This is a summary of recent recommendations and price targets for Easterly Government Properties and Northstar Realty Europe, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Easterly Government Properties 0 1 3 0 2.75
Northstar Realty Europe 0 2 0 0 2.00

Easterly Government Properties currently has a consensus price target of $21.00, suggesting a potential upside of 13.21%. Northstar Realty Europe has a consensus price target of $17.50, suggesting a potential upside of 2.94%. Given Easterly Government Properties’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Easterly Government Properties is more favorable than Northstar Realty Europe.

Insider & Institutional Ownership

93.0% of Easterly Government Properties shares are held by institutional investors. Comparatively, 64.9% of Northstar Realty Europe shares are held by institutional investors. 12.1% of Easterly Government Properties shares are held by company insiders. Comparatively, 1.5% of Northstar Realty Europe 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.

Risk and Volatility

Easterly Government Properties has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Northstar Realty Europe has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Summary

Easterly Government Properties beats Northstar Realty Europe on 9 of the 15 factors compared between the two stocks.

Easterly Government Properties Company Profile

Easterly Government Properties, Inc. (NYSE:DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly's experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).

Northstar Realty Europe Company Profile

NorthStar Realty Europe Corp. is a European focused commercial real estate company with predominately prime office properties within key cities in Germany, the United Kingdom and France, organized as a REIT and managed by an affiliate of Colony Capital, Inc. (NYSE: CLNY), a leading global equity REIT with an embedded investment management platform.

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