EastGroup Properties (NYSE: EGP) and Prologis (NYSE:PLD) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

98.0% of EastGroup Properties shares are owned by institutional investors. Comparatively, 96.0% of Prologis shares are owned by institutional investors. 2.9% of EastGroup Properties shares are owned by company insiders. Comparatively, 1.3% of Prologis shares are owned 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 Recommendations

This is a breakdown of recent recommendations and price targets for EastGroup Properties and Prologis, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EastGroup Properties 1 7 2 0 2.10
Prologis 0 4 11 0 2.73

EastGroup Properties currently has a consensus target price of $79.50, indicating a potential downside of 10.88%. Prologis has a consensus target price of $59.36, indicating a potential downside of 6.93%. Given Prologis’ stronger consensus rating and higher probable upside, analysts plainly believe Prologis is more favorable than EastGroup Properties.

Earnings & Valuation

This table compares EastGroup Properties and Prologis’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EastGroup Properties $263.59 million 11.56 $161.56 million $2.37 37.64
Prologis $2.94 billion 11.54 $1.96 billion $2.22 28.73

Prologis has higher revenue and earnings than EastGroup Properties. Prologis is trading at a lower price-to-earnings ratio than EastGroup Properties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares EastGroup Properties and Prologis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EastGroup Properties 30.20% 12.05% 4.38%
Prologis 43.99% 6.65% 3.95%

Dividends

EastGroup Properties pays an annual dividend of $2.48 per share and has a dividend yield of 2.8%. Prologis pays an annual dividend of $1.76 per share and has a dividend yield of 2.8%. EastGroup Properties pays out 104.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Prologis pays out 79.3% 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 has raised its dividend for 5 consecutive years and Prologis has raised its dividend for 3 consecutive years. EastGroup Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

EastGroup Properties has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Prologis has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Summary

EastGroup Properties beats Prologis on 9 of the 17 factors compared between the two stocks.

About EastGroup Properties

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.

About Prologis

Prologis, Inc. is a real estate investment trust (REIT) company. The Company is engaged in logistics real estate business. The Company’s segments include Real Estate Operations and Strategic Capital. The Real estate operations segment consists of rental operations and development. The Company’s strategic capital segment includes asset management services, as well as services performed for unconsolidated co-investment ventures. Its strategic capital segment gives the Company access to third-party capital, both private and public. As of December 31, 2016, the Company owned or had investments in, on an owned basis or through co-investment ventures, properties and development projects across 676 million square feet (63 million square meters) in 20 countries spanning four continents.

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