Brandywine Realty Trust (NYSE: BDN) and Paramount Group (NYSE:PGRE) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Brandywine Realty Trust and Paramount Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brandywine Realty Trust $512.29 million 6.08 $227.17 million $0.08 223.40
Paramount Group $708.66 million 5.47 $384.89 million $0.41 39.59

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

Insider & Institutional Ownership

98.4% of Brandywine Realty Trust shares are owned by institutional investors. Comparatively, 62.8% of Paramount Group shares are owned by institutional investors. 1.8% of Brandywine Realty Trust shares are owned by company insiders. Comparatively, 5.7% of Paramount Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Brandywine Realty Trust pays an annual dividend of $0.64 per share and has a dividend yield of 3.6%. Paramount Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.3%. Brandywine Realty Trust pays out 800.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Paramount Group pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brandywine Realty Trust has increased its dividend for 2 consecutive years. Brandywine Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Brandywine Realty Trust and Paramount Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brandywine Realty Trust 1 3 4 0 2.38
Paramount Group 2 1 1 0 1.75

Brandywine Realty Trust currently has a consensus price target of $17.50, indicating a potential downside of 2.07%. Paramount Group has a consensus price target of $15.50, indicating a potential downside of 4.50%. Given Brandywine Realty Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe Brandywine Realty Trust is more favorable than Paramount Group.

Risk & Volatility

Brandywine Realty Trust has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Paramount Group has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Profitability

This table compares Brandywine Realty Trust and Paramount Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brandywine Realty Trust 4.67% 1.48% 0.68%
Paramount Group 13.88% 1.99% 1.12%

Summary

Paramount Group beats Brandywine Realty Trust on 9 of the 17 factors compared between the two stocks.

Brandywine Realty Trust Company Profile

Brandywine Realty Trust is a self-administered and self-managed real estate investment trust (REIT). The Company operates through five segments: Pennsylvania Suburbs, Philadelphia Central Business District (CBD), Metropolitan Washington, D.C., Austin, Texas, and Other. The Pennsylvania Suburbs segment includes properties in Chester, Delaware and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in the District of Columbia, Northern Virginia and Southern Maryland. The Austin, Texas segment includes properties in the City of Austin, Texas. The Other segment includes properties in Burlington and Camden counties in New Jersey, New Castle County in the state of Delaware and the City of Concord in California. As of December 31, 2016, the Company owned 113 properties that had approximately 17.6 million net rentable square feet.

Paramount Group Company Profile

Paramount Group, Inc. is a fully-integrated real estate investment trust (REIT) focused on owning, operating, managing, acquiring and redeveloping Class A office properties in select central business district submarkets of New York City, Washington, District of Columbia (D.C.) and San Francisco. The Company conducts its business through, and substantially all its interests in properties and investments are held by, Paramount Group Operating Partnership LP (the Operating Partnership). The Company’s segments include New York, Washington, D.C. and San Francisco. As of December 31, 2016, the Company’s portfolio consisted of 13 Class A office properties aggregating approximately 10.8 million square feet that was 93.3% leased and 90.9% occupied. The Company also has an investment management business, where it serves as the general partner and property manager of certain private equity real estate funds for institutional investors and high-net-worth individuals.

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