Alexandria Real Estate Equities (NYSE:ARE) and Healthcare Realty Trust (NYSE:HR) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.
Valuation & Earnings
This table compares Alexandria Real Estate Equities and Healthcare Realty Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Alexandria Real Estate Equities||$1.13 billion||11.25||$169.09 million||$6.02||19.94|
|Healthcare Realty Trust||$424.50 million||7.99||$23.09 million||$1.53||17.71|
Alexandria Real Estate Equities has higher revenue and earnings than Healthcare Realty Trust. Healthcare Realty Trust is trading at a lower price-to-earnings ratio than Alexandria Real Estate Equities, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for Alexandria Real Estate Equities and Healthcare Realty Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alexandria Real Estate Equities||0||2||6||0||2.75|
|Healthcare Realty Trust||0||7||1||0||2.13|
Alexandria Real Estate Equities presently has a consensus price target of $105.42, suggesting a potential downside of 12.18%. Healthcare Realty Trust has a consensus price target of $29.25, suggesting a potential upside of 7.93%. Given Healthcare Realty Trust’s higher probable upside, analysts plainly believe Healthcare Realty Trust is more favorable than Alexandria Real Estate Equities.
Alexandria Real Estate Equities pays an annual dividend of $3.72 per share and has a dividend yield of 3.1%. Healthcare Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 4.4%. Alexandria Real Estate Equities pays out 61.8% of its earnings in the form of a dividend. Healthcare Realty Trust pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities has raised its dividend for 7 consecutive years.
Volatility & Risk
Alexandria Real Estate Equities has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, Healthcare Realty Trust has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500.
Institutional and Insider Ownership
99.0% of Alexandria Real Estate Equities shares are owned by institutional investors. Comparatively, 93.6% of Healthcare Realty Trust shares are owned by institutional investors. 1.4% of Alexandria Real Estate Equities shares are owned by insiders. Comparatively, 1.8% of Healthcare Realty Trust 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 Alexandria Real Estate Equities and Healthcare Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alexandria Real Estate Equities||22.86%||4.36%||2.25%|
|Healthcare Realty Trust||2.95%||0.72%||0.41%|
Alexandria Real Estate Equities beats Healthcare Realty Trust on 14 of the 17 factors compared between the two stocks.
Alexandria Real Estate Equities Company Profile
Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500 company, is an urban office real estate investment trust ("REIT") uniquely focused on collaborative life science and technology campuses in AAA innovation cluster locations, with a total market capitalization of $18.8 billion and an asset base in North America of 32.0 million SF as of June 30, 2018. The asset base in North America includes 21.5 million RSF of operating properties and 3.5 million RSF of development and redevelopment of new Class A properties currently undergoing construction and pre-construction activities with target delivery dates ranging from 2018 through 2020. Additionally, the asset base in North America includes 7.0 million SF of intermediate-term and future development projects. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle Park. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science and technology campuses that provide its innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science and technology companies through its venture capital arm. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.
Healthcare Realty Trust Company Profile
Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of June 30, 2018, the Company owned 201 real estate properties in 27 states totaling 14.9 million square feet and was valued at approximately $5.0 billion. The Company provided leasing and property management services to 11.2 million square feet nationwide.
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