Boston Properties (BXP) and Paramount Group (PGRE) Critical Analysis
Boston Properties (NYSE: BXP) and Paramount Group (NYSE:PGRE) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Institutional & Insider Ownership
94.5% of Boston Properties shares are held by institutional investors. Comparatively, 62.3% of Paramount Group shares are held by institutional investors. 6.2% of Boston Properties shares are held by insiders. Comparatively, 5.9% of Paramount Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Boston Properties and Paramount Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Boston Properties has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Paramount Group has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.
Boston Properties pays an annual dividend of $3.00 per share and has a dividend yield of 2.4%. Paramount Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.3%. 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. 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.
This is a breakdown of current recommendations and price targets for Boston Properties and Paramount Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Boston Properties currently has a consensus price target of $132.91, suggesting a potential upside of 7.51%. Paramount Group has a consensus price target of $15.50, suggesting a potential downside of 4.26%. Given Boston Properties’ stronger consensus rating and higher possible upside, research analysts plainly believe Boston Properties is more favorable than Paramount Group.
Earnings & Valuation
This table compares Boston Properties and Paramount Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Boston Properties||$2.57 billion||7.42||$1.51 billion||$2.94||42.05|
|Paramount Group||$708.66 million||5.45||$384.89 million||$0.41||39.49|
Boston Properties has higher revenue and earnings than Paramount Group. Paramount Group is trading at a lower price-to-earnings ratio than Boston Properties, indicating that it is currently the more affordable of the two stocks.
Boston Properties beats Paramount Group on 14 of the 16 factors compared between the two stocks.
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.
About Paramount Group
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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