Rexford Industrial Realty (NYSE: REXR) and Stag Industrial (NYSE:STAG) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Risk & Volatility

Rexford Industrial Realty has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Stag Industrial has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Profitability

This table compares Rexford Industrial Realty and Stag Industrial’s 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%
Stag Industrial 12.22% 3.97% 1.66%

Institutional & Insider Ownership

98.8% of Rexford Industrial Realty shares are held by institutional investors. Comparatively, 81.3% of Stag Industrial shares are held by institutional investors. 2.1% of Rexford Industrial Realty shares are held by company insiders. Comparatively, 2.0% of Stag Industrial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Rexford Industrial Realty and Stag Industrial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rexford Industrial Realty 0 2 1 0 2.33
Stag Industrial 0 1 6 0 2.86

Rexford Industrial Realty presently has a consensus target price of $23.75, indicating a potential downside of 20.97%. Stag Industrial has a consensus target price of $27.58, indicating a potential downside of 1.45%. Given Stag Industrial’s stronger consensus rating and higher possible upside, analysts plainly believe Stag Industrial is more favorable than Rexford Industrial Realty.

Valuation and Earnings

This table compares Rexford Industrial Realty and Stag Industrial’s 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 15.24 $82.43 million $0.45 66.78
Stag Industrial $270.80 million 9.53 $185.80 million $0.28 99.96

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

Dividends

Rexford Industrial Realty pays an annual dividend of $0.58 per share and has a dividend yield of 1.9%. Stag Industrial pays an annual dividend of $1.41 per share and has a dividend yield of 5.0%. 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. Stag Industrial pays out 503.6% 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 6 consecutive years.

Summary

Stag Industrial beats Rexford Industrial Realty on 9 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.

Stag Industrial Company Profile

STAG Industrial, Inc. is a real estate investment trust. The Company is focused on the acquisition, ownership, and operation of single-tenant, industrial properties across the United States. As of December 31, 2016, the Company owned 314 buildings in 37 states with approximately 60.9 million rentable square feet, consisting of 243 warehouse/distribution buildings, 54 light manufacturing buildings, 16 flex/office buildings, and one building in redevelopment. The Company owns all of its properties and conducts its business primarily through STAG Industrial Operating Partnership, L.P. (Operating Partnership). The Company invests in properties historically used for industrial, light manufacturing and commercial purposes. As of December 31, 2016, the Company’s properties were in various locations, such as Montgomery, Alabama; Rogers, Arkansas; Phoenix, Arizona; Sparks, Maryland; Camarillo, California, and Golden and Grand Junction in Colorado.

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