Equity One (NYSE: EQY) and Douglas Emmett (NYSE:DEI) are both mid-cap commercial reits – nec companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

64.0% of Equity One shares are owned by institutional investors. Comparatively, 96.3% of Douglas Emmett shares are owned by institutional investors. 35.9% of Equity One shares are owned by company insiders. Comparatively, 17.8% of Douglas Emmett shares are owned 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.

Profitability

This table compares Equity One and Douglas Emmett’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity One 18.64% 3.82% 2.05%
Douglas Emmett 12.00% 2.95% 1.18%

Volatility & Risk

Equity One has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Dividends

Douglas Emmett pays an annual dividend of $0.92 per share and has a dividend yield of 2.3%. Equity One does not pay a dividend. Douglas Emmett pays out 155.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Equity One and Douglas Emmett, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity One 0 1 0 0 2.00
Douglas Emmett 2 7 1 0 1.90

Douglas Emmett has a consensus target price of $40.00, suggesting a potential downside of 1.01%. Given Douglas Emmett’s higher possible upside, analysts clearly believe Douglas Emmett is more favorable than Equity One.

Valuation and Earnings

This table compares Equity One and Douglas Emmett’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Equity One N/A N/A N/A $0.49 62.96
Douglas Emmett $742.55 million 8.86 $85.39 million $0.59 68.49

Douglas Emmett has higher revenue and earnings than Equity One. Equity One is trading at a lower price-to-earnings ratio than Douglas Emmett, indicating that it is currently the more affordable of the two stocks.

Equity One Company Profile

Equity One, Inc. is a real estate investment trust (REIT). The Company owns, manages, acquires, develops and redevelops shopping centers and retail properties located in supply constrained suburban and urban communities. As of December 31, 2016, the Company’s portfolio consisted of 122 properties, including 101 retail properties and five non-retail properties totaling approximately 12.8 million square feet of gross leasable area (GLA), 10 development or redevelopment properties with approximately 2.3 million square feet of GLA, and six land parcels. Its retail occupancy excluding developments and redevelopments was 95.8% and included national, regional and local tenants as of December 31, 2016. In addition, the Company had joint venture interests in six retail properties and two office buildings totaling approximately 1.4 million square feet of GLA as of December 31, 2016.

Douglas Emmett Company Profile

Douglas Emmett, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is owner and operator of office and multifamily properties located in submarkets in Los Angeles and Honolulu. The Company operates through two segments: the acquisition, development, ownership and management of office real estate (Office Segment), and the acquisition, development, ownership and management of multifamily real estate (Multifamily Segment). The services for its Office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for its Multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. It focuses on owning, acquiring developing and managing a substantial share of office properties and multifamily communities in neighborhoods.

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