Comparing Gramercy Property Trust (NYSE:GPT) and Equity Commonwealth (EQC)

Gramercy Property Trust (NYSE: GPT) and Equity Commonwealth (NYSE:EQC) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Institutional and Insider Ownership

82.7% of Gramercy Property Trust shares are owned by institutional investors. Comparatively, 93.2% of Equity Commonwealth shares are owned by institutional investors. 1.0% of Gramercy Property Trust shares are owned by company insiders. Comparatively, 1.0% of Equity Commonwealth shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Gramercy Property Trust and Equity Commonwealth, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gramercy Property Trust 0 2 2 0 2.50
Equity Commonwealth 0 3 1 0 2.25

Gramercy Property Trust currently has a consensus target price of $34.00, suggesting a potential upside of 18.30%. Equity Commonwealth has a consensus target price of $32.00, suggesting a potential upside of 5.09%. Given Gramercy Property Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Gramercy Property Trust is more favorable than Equity Commonwealth.

Valuation and Earnings

This table compares Gramercy Property Trust and Equity Commonwealth’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gramercy Property Trust $525.64 million 8.31 $368.69 million $0.09 319.37
Equity Commonwealth $409.33 million 9.23 $194.30 million $0.86 35.41

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

Dividends

Gramercy Property Trust pays an annual dividend of $1.50 per share and has a dividend yield of 5.2%. Equity Commonwealth does not pay a dividend. Gramercy Property Trust pays out 1,666.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gramercy Property Trust has raised its dividend for 2 consecutive years.

Profitability

This table compares Gramercy Property Trust and Equity Commonwealth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gramercy Property Trust 4.35% 0.81% 0.40%
Equity Commonwealth 28.50% 3.69% 2.52%

Risk and Volatility

Gramercy Property Trust has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Equity Commonwealth has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.

Summary

Equity Commonwealth beats Gramercy Property Trust on 9 of the 17 factors compared between the two stocks.

Gramercy Property Trust Company Profile

Gramercy Property Trust is a real estate investment trust (REIT), which is an investor and asset manager of commercial real estate. The Company’s operating segments include Investments/Corporate and Asset Management. The Investments/Corporate segment includes all of its activities related to the investment and ownership of commercial properties located throughout the United States and Europe. The Asset Management segment includes substantially all of its activities related to asset and property management of commercial properties located throughout the United States and Europe. It is engaged in acquiring and managing single-tenant, net leased industrial, office and specialty properties. It focuses on income producing properties leased to tenants in markets in the United States and Europe. It earns revenues through rental revenues on properties that it owns in the United States and asset management revenues on properties owned by third parties in the United States and Europe.

Equity Commonwealth Company Profile

Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of December 31, 2016, the Company’s portfolio included 33 properties, one land parcel and one property taken out of a service, classified as a land parcel, with a combined 16.1 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.

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