City Office REIT (NYSE: CIO) and Boston Properties (NYSE:BXP) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Profitability

This table compares City Office REIT and Boston Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
City Office REIT 3.70% 1.91% 0.51%
Boston Properties 18.18% 5.98% 2.44%

Insider and Institutional Ownership

53.0% of City Office REIT shares are owned by institutional investors. Comparatively, 94.6% of Boston Properties shares are owned by institutional investors. 3.2% of City Office REIT shares are owned by insiders. Comparatively, 0.9% of Boston Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

City Office REIT has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, Boston Properties has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for City Office REIT and Boston Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
City Office REIT 0 1 3 0 2.75
Boston Properties 0 8 4 0 2.33

City Office REIT presently has a consensus price target of $14.83, indicating a potential upside of 14.19%. Boston Properties has a consensus price target of $134.55, indicating a potential upside of 10.57%. Given City Office REIT’s stronger consensus rating and higher probable upside, equities analysts clearly believe City Office REIT is more favorable than Boston Properties.

Dividends

City Office REIT pays an annual dividend of $0.94 per share and has a dividend yield of 7.2%. Boston Properties pays an annual dividend of $3.00 per share and has a dividend yield of 2.5%. City Office REIT pays out -723.1% of its earnings in the form of a dividend. Boston Properties pays out 102.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. City Office REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares City Office REIT and Boston Properties’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
City Office REIT $90.65 million 4.34 $47.13 million ($0.13) -99.92
Boston Properties $2.57 billion 7.31 $1.51 billion $2.94 41.39

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

Summary

Boston Properties beats City Office REIT on 10 of the 15 factors compared between the two stocks.

About City Office REIT

City Office REIT, Inc. is a real estate investment trust. The Company is focused on acquiring, owning and operating office properties located primarily in metropolitan areas in the Southern and Western United States. It conducts its operations primarily through City Office REIT Operating Partnership, L.P. (the Operating Partnership). As of December 31, 2016, it owned 18 office complexes consisting of 37 office buildings with a total of approximately 4.4 million square feet of net rentable area (NRA) in the metropolitan areas of Boise, Dallas, Denver, Orlando, Phoenix, Portland and Tampa. Its properties include Park Tower, City Center, Intellicenter and Carillon Point in Tampa, Florida; Cherry Creek, Plaza 25, DTC Crossroads, Superior Pointe and Logan Tower in Denver, Colorado; Washington Group Plaza in Boise, Idaho; FRP Collection, Central Fairwinds and FRP Ingenuity Drive in Orlando, Florida; 190 Office Center and Lake Vista Pointe in Dallas, Texas, and SanTan in Phoenix, Arizona.

About Boston Properties

Boston Properties, Inc. is a real estate investment trust. The Company is an owner and developer of office properties in the United States. Its segments by geographic area are Boston, New York, San Francisco and Washington, DC. Its segments by property type include Office, Residential and Hotel. As of December 31, 2016, the Company owned or had interests in 174 commercial real estate properties, aggregating approximately 47.7 million net rentable square feet of primarily Class A office properties, including eight properties under construction/redevelopment totaling approximately 4.0 million net rentable square feet. As of December 31, 2016, its properties consisted of 164 Office properties (including six properties under construction/redevelopment); one hotel; five retail properties, and four residential properties (including two under construction). Its tenant base includes sectors, such as media technology, legal services, government/public administration and retail.

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