SL Green Realty Corporation (SLG) and NorthStar Realty Europe Corp. (NRE) Critical Comparison
SL Green Realty Corporation (NYSE: SLG) and NorthStar Realty Europe Corp. (NYSE:NRE) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.
Volatility & Risk
SL Green Realty Corporation has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, NorthStar Realty Europe Corp. has a beta of 2.48, suggesting that its stock price is 148% more volatile than the S&P 500.
Valuation & Earnings
This table compares SL Green Realty Corporation and NorthStar Realty Europe Corp.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SL Green Realty Corporation||$1.53 billion||6.23||$871.44 million||$0.97||99.36|
|NorthStar Realty Europe Corp.||$131.25 million||5.23||$37.01 million||($0.45)||-27.62|
SL Green Realty Corporation has higher revenue and earnings than NorthStar Realty Europe Corp.. NorthStar Realty Europe Corp. is trading at a lower price-to-earnings ratio than SL Green Realty Corporation, indicating that it is currently the more affordable of the two stocks.
SL Green Realty Corporation pays an annual dividend of $3.10 per share and has a dividend yield of 3.2%. NorthStar Realty Europe Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 4.8%. SL Green Realty Corporation pays out 319.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NorthStar Realty Europe Corp. pays out -133.3% of its earnings in the form of a dividend. SL Green Realty Corporation has increased its dividend for 5 consecutive years. NorthStar Realty Europe Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
70.0% of NorthStar Realty Europe Corp. shares are held by institutional investors. 3.1% of SL Green Realty Corporation shares are held by company insiders. Comparatively, 2.2% of NorthStar Realty Europe Corp. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This table compares SL Green Realty Corporation and NorthStar Realty Europe Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SL Green Realty Corporation||7.20%||1.43%||0.72%|
|NorthStar Realty Europe Corp.||-18.57%||7.73%||2.46%|
This is a summary of recent ratings and price targets for SL Green Realty Corporation and NorthStar Realty Europe Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SL Green Realty Corporation||0||7||5||0||2.42|
|NorthStar Realty Europe Corp.||0||0||0||0||N/A|
SL Green Realty Corporation currently has a consensus target price of $115.82, indicating a potential upside of 20.17%. Given SL Green Realty Corporation’s higher probable upside, equities research analysts clearly believe SL Green Realty Corporation is more favorable than NorthStar Realty Europe Corp..
SL Green Realty Corporation beats NorthStar Realty Europe Corp. on 9 of the 15 factors compared between the two stocks.
SL Green Realty Corporation Company Profile
SL Green Realty Corp. is a self-managed real estate investment trust (REIT), with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction and leasing. The Company operates through two segments: real estate, and debt and preferred equity investments. It acquires, owns, repositions, manages and leases commercial office, retail and multifamily properties in the New York Metropolitan area. Its debt and preferred equity activities include purchases and originations, inclusive of advances under future funding obligations, discount and fee amortization, and paid-in-kind interest. As of December 31, 2016, the Company owned or held interests in 24 consolidated commercial office buildings encompassing approximately 16.1 million rentable square feet and seven unconsolidated commercial office buildings encompassing approximately 6.6 million rentable square feet located primarily in midtown Manhattan.
NorthStar Realty Europe Corp. Company Profile
NorthStar Realty Europe Corp. is a real estate investment trust (REIT). The Company is a European focused commercial real estate company with primary office properties in cities within Germany, the United Kingdom and France. Its objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time. The Company conducts its business through two segments: Real Estate and Corporate. Its European commercial real estate business is primarily focused on office properties. Its portfolio consists of approximately 48 properties and a total of approximately 495,588 square meters of rentable space, located in various European markets, including Frankfurt, Hamburg, Berlin, London, Paris, Amsterdam, Milan, Brussels and Madrid. Its overall portfolio is over 87% occupied. In addition, it owns over two hotels, which are leased to third-party operators. It is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NSAM).
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