Contrasting First Potomac Realty Trust (FPO) and PS Business Parks (PSB)
First Potomac Realty Trust (NYSE: FPO) and PS Business Parks (NYSE:PSB) are both financials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.
Institutional & Insider Ownership
93.1% of First Potomac Realty Trust shares are owned by institutional investors. Comparatively, 72.0% of PS Business Parks shares are owned by institutional investors. 2.1% of First Potomac Realty Trust shares are owned by insiders. Comparatively, 1.6% of PS Business Parks shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares First Potomac Realty Trust and PS Business Parks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Potomac Realty Trust||-7.99%||-2.35%||-0.94%|
|PS Business Parks||39.78%||16.95%||7.69%|
First Potomac Realty Trust pays an annual dividend of $0.40 per share and has a dividend yield of 3.6%. PS Business Parks pays an annual dividend of $3.40 per share and has a dividend yield of 2.6%. First Potomac Realty Trust pays out 58.0% of its earnings in the form of a dividend. PS Business Parks pays out 113.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks has increased its dividend for 3 consecutive years. First Potomac Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current recommendations and price targets for First Potomac Realty Trust and PS Business Parks, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Potomac Realty Trust||2||2||1||0||1.80|
|PS Business Parks||1||1||0||0||1.50|
First Potomac Realty Trust currently has a consensus price target of $11.03, indicating a potential downside of 0.99%. PS Business Parks has a consensus price target of $107.00, indicating a potential downside of 19.19%. Given First Potomac Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe First Potomac Realty Trust is more favorable than PS Business Parks.
Earnings & Valuation
This table compares First Potomac Realty Trust and PS Business Parks’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|First Potomac Realty Trust||N/A||N/A||N/A||$0.69||16.14|
|PS Business Parks||$387.39 million||9.31||$128.02 million||$3.00||44.14|
PS Business Parks has higher revenue and earnings than First Potomac Realty Trust. First Potomac Realty Trust is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
First Potomac Realty Trust has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.
First Potomac Realty Trust beats PS Business Parks on 8 of the 14 factors compared between the two stocks.
About First Potomac Realty Trust
First Potomac Realty Trust (First Potomac) is engaged in ownership, management, redevelopment and development of office and business park properties in the greater Washington, D.C. region. The Company’s segments include Washington, D.C., Maryland, Northern Virginia and Southern Virginia. The Company conducts its business through First Potomac Realty Investment Limited Partnership, its operating partnership. The Company’s portfolio consist a mix of single-tenant and multi-tenant office properties, and business parks. The office properties are single-story and multi-story buildings that are primarily for office uses, and business parks consists of buildings with office features combined with some industrial property space. As of December 31, 2016, the Company owned properties totaling 6.7 million square feet and had a non-controlling ownership interest in properties totaling an additional 0.9 million square feet through five unconsolidated joint ventures.
About PS Business Parks
PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust (REIT). The Company owns, operates and develops commercial properties, primarily multi-tenant flex, office and industrial parks. It focuses on owning concentrated business parks. PS Business Parks, L.P. (the Operating Partnership) is a California limited partnership, which owns directly or indirectly substantially all of its assets and through, which the Company conducts substantially all of its business. PSB is the partner of the Operating Partnership and, as of December 31, 2016, owned 77.9% of the common partnership units. The remaining common partnership units are owned by Public Storage (PS). As of December 31, 2016, the Company owned and operated 28.1 million rentable square feet of commercial space, comprising 99 business parks, in the states, including California, Texas, Virginia, Florida, Maryland and Washington. It also manages 684,000 rentable square feet on behalf of PS.
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