NRF Holdco (NYSE: NRF) and Vornado Realty Trust (NYSE:VNO) are both financials 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.

Insider & Institutional Ownership

69.7% of NRF Holdco shares are held by institutional investors. Comparatively, 86.1% of Vornado Realty Trust shares are held by institutional investors. 2.4% of NRF Holdco shares are held by company insiders. Comparatively, 9.7% of Vornado Realty Trust 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

NRF Holdco has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500. Comparatively, Vornado Realty Trust has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Earnings & Valuation

This table compares NRF Holdco and Vornado Realty Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NRF Holdco N/A N/A N/A ($2.38) -6.78
Vornado Realty Trust $2.70 billion 5.19 $1.40 billion $4.64 15.93

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

Profitability

This table compares NRF Holdco and Vornado Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NRF Holdco -16.61% -17.86% -2.44%
Vornado Realty Trust 37.96% 4.51% 1.39%

Dividends

NRF Holdco pays an annual dividend of $1.60 per share and has a dividend yield of 9.9%. Vornado Realty Trust pays an annual dividend of $2.40 per share and has a dividend yield of 3.2%. NRF Holdco pays out -67.2% of its earnings in the form of a dividend. Vornado Realty Trust pays out 51.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NRF Holdco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations and price targets for NRF Holdco and Vornado Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NRF Holdco 0 1 1 0 2.50
Vornado Realty Trust 0 4 5 0 2.56

NRF Holdco currently has a consensus price target of $16.00, suggesting a potential downside of 0.81%. Vornado Realty Trust has a consensus price target of $94.56, suggesting a potential upside of 27.95%. Given Vornado Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Vornado Realty Trust is more favorable than NRF Holdco.

Summary

Vornado Realty Trust beats NRF Holdco on 10 of the 13 factors compared between the two stocks.

About NRF Holdco

NRF Holdco LLC. is a commercial real estate company. The Company invests in multiple asset classes across commercial real estate (CRE). Its portfolio consists of healthcare, hotel, manufactured housing communities, net lease and multifamily properties. The Company also invests in other opportunistic real estate investments, such as indirect interests in real estate through its investments in private equity funds (PE Investments). The Company also acquires and operates hotel and certain healthcare properties. The Company’s segments include Real Estate, Commercial Real Estate Debt (CRE debt), Commercial Real Estate Securities, N-Star CDOs and Corporate. Its real estate equity investments that operate under the REIT Investment Diversification and Empowerment Act (RIDEA) structure generate resident and hotel guest related income from short-term residential agreements. The Company is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc.

About Vornado Realty Trust

Vornado Realty Trust is a real estate investment trust (REIT). The Company conducts its business through Vornado Realty L.P. (the Operating Partnership). The Company operates through two segments: New York and Washington, DC. As of December 31, 2016, the Company’s New York segment consisted of 28.3 million square feet in 86 properties. Its properties include 1290 Avenue of the Americas, Two Penn Plaza, 770 Broadway and 90 Park Avenue. As of December 31, 2016, the Company’s Washington, DC segment consisted of 58 properties aggregating 14.7 million square feet, including 11.1 million square feet of office space in 44 properties, nine residential properties containing 3,156 units and a hotel property. Its properties include 2001 Jefferson Davis Highway, 223 23rd Street, 2221 South Clark Street and 1700 M Street. The Company’s interests in properties are held by the Operating Partnership. As of December 31, 2016, the Company owned the 3.7 million square foot Mart (theMart) in Chicago.

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