Columbia Property Trust (NYSE: CXP) and Realty Income Corporation (NYSE:O) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, earnings, profitability and risk.

Insider and Institutional Ownership

64.8% of Columbia Property Trust shares are owned by institutional investors. Comparatively, 69.0% of Realty Income Corporation shares are owned by institutional investors. 0.5% of Columbia Property Trust shares are owned by company insiders. Comparatively, 0.3% of Realty Income Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Columbia Property Trust has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Realty Income Corporation has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Profitability

This table compares Columbia Property Trust and Realty Income Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Property Trust 37.27% 5.55% 3.30%
Realty Income Corporation 29.19% 5.14% 2.62%

Analyst Ratings

This is a breakdown of recent recommendations for Columbia Property Trust and Realty Income Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Property Trust 0 3 4 0 2.57
Realty Income Corporation 2 4 3 0 2.11

Columbia Property Trust presently has a consensus price target of $23.80, suggesting a potential upside of 12.11%. Realty Income Corporation has a consensus price target of $66.00, suggesting a potential upside of 16.75%. Given Realty Income Corporation’s higher probable upside, analysts clearly believe Realty Income Corporation is more favorable than Columbia Property Trust.

Dividends

Columbia Property Trust pays an annual dividend of $0.80 per share and has a dividend yield of 3.8%. Realty Income Corporation pays an annual dividend of $2.54 per share and has a dividend yield of 4.5%. Columbia Property Trust pays out 70.2% of its earnings in the form of a dividend. Realty Income Corporation pays out 217.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income Corporation has increased its dividend for 21 consecutive years. Realty Income Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Columbia Property Trust and Realty Income Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Columbia Property Trust $376.05 million 6.84 $171.48 million $1.14 18.62
Realty Income Corporation $1.16 billion 13.36 $1.05 billion $1.17 48.32

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

Summary

Realty Income Corporation beats Columbia Property Trust on 9 of the 17 factors compared between the two stocks.

Columbia Property Trust Company Profile

Columbia Property Trust, Inc. operates as a real estate investment trust (REIT), which owns and operates commercial real estate properties. The Company’s primary objective is to generate long-term shareholder returns from a combination of steadily growing cash flows and appreciation in its net asset values, through the acquisition and ownership of office buildings located principally in high-barrier-to-entry markets. The Company’s segments include New York, San Francisco, Atlanta, Washington, D.C., Boston, Los Angeles and all other office markets. The all other office markets segment consists of properties in similar, low-barrier to entry geographic locations, in which the Company does not plan to make further investments. The Company conducts its business primarily through Columbia Property Trust Operating Partnership, L.P. (Columbia Property Trust OP), which acquires, develops, owns, leases and operates real properties directly through subsidiaries or through joint ventures.

Realty Income Corporation Company Profile

Realty Income Corporation is a real estate investment trust (REIT). The Company is engaged in in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities. As of December 31, 2016, the Company owned a diversified portfolio of 4,944 properties located in 49 states and Puerto Rico, with over 83.0 million square feet of leasable space leased to 248 different commercial tenants doing business in 47 separate industries. As of December 31, 2016, of the 4,944 properties in the portfolio, 4,920, or 99.5%, were single-tenant properties, and the remaining were multi-tenant properties. As of December 31, 2016, of the 4,920 single-tenant properties, 4,836 were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.8 years.

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