InfraREIT (NYSE: HIFR) and CyrusOne (NASDAQ:CONE) are both specialized reits – nec companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
This is a summary of current recommendations and price targets for InfraREIT and CyrusOne, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
InfraREIT currently has a consensus target price of $23.00, suggesting a potential upside of 8.29%. CyrusOne has a consensus target price of $62.08, suggesting a potential upside of 0.46%. Given InfraREIT’s higher possible upside, research analysts clearly believe InfraREIT is more favorable than CyrusOne.
InfraREIT pays an annual dividend of $1.00 per share and has a dividend yield of 4.7%. CyrusOne pays an annual dividend of $1.68 per share and has a dividend yield of 2.7%. InfraREIT pays out 86.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CyrusOne pays out -173.2% of its earnings in the form of a dividend.
Valuation and Earnings
This table compares InfraREIT and CyrusOne’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|InfraREIT||$172.10 million||5.41||$49.95 million||$1.16||18.31|
|CyrusOne||$529.10 million||10.67||$19.90 million||($0.97)||-63.71|
InfraREIT has higher revenue, but lower earnings than CyrusOne. CyrusOne is trading at a lower price-to-earnings ratio than InfraREIT, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
84.4% of InfraREIT shares are held by institutional investors. Comparatively, 97.3% of CyrusOne shares are held by institutional investors. 28.0% of InfraREIT shares are held by company insiders. Comparatively, 1.6% of CyrusOne shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares InfraREIT and CyrusOne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
InfraREIT beats CyrusOne on 8 of the 14 factors compared between the two stocks.
InfraREIT Company Profile
InfraREIT, Inc. is a real estate investment trust. The Company is engaged in owning and leasing rate-regulated transmission and distribution (T&D) assets in Texas. It leases its T&D assets to Sharyland Utilities, L.P. Its assets are located in the Texas Panhandle near Amarillo, the Permian Basin in and around Stanton, Central Texas around Brady, Northeast Texas in and around Celeste and South Texas near McAllen. As of December 31, 2016, its T&D assets consisted of approximately 54,000 electricity delivery points, approximately 815 circuit miles of transmission lines, approximately 40,500 circuit miles of distribution lines, 57 substations and a 300 megawatt high-voltage direct current (DC) Tie between Texas and Mexico (Railroad DC Tie). As of December 31, 2016, its T&D assets in each of its leases included S/B/C Lease, McAllen Lease, competitive renewable energy zone (CREZ) Lease, Stanton Transmission Loop Lease and Electric Reliability Council of Texas (ERCOT) Transmission Lease.
CyrusOne Company Profile
CyrusOne Inc. is a real estate investment trust. The Company is an owner, operator and developer of enterprise-class, carrier-neutral, multi-tenant data center properties. The Company’s data centers are generally purpose-built facilities with redundant power and cooling. The CyrusOne National IX Platform (the National IX Platform) delivers interconnection across states and between metro-enabled sites within its footprint and beyond. The Company has data centers in the United States, London and Singapore. As of December 31, 2016, the Company provided mission-critical data center facilities for 932 customers in 35 data centers and two recovery centers in 11 distinct markets (nine cities in the United States, London and Singapore) with approximately 3,904,000 net rentable square feet (NRSF). The Company provides round the clock security guard monitoring with customizable security features. As of December 31, 2016, the Company had approximately 1,657,000 NRSF under development.
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