Head-To-Head Review: Alexandria Real Estate Equities (ARE) and Its Competitors

Alexandria Real Estate Equities (NYSE: ARE) is one of 77 public companies in the “Commercial REITs” industry, but how does it compare to its competitors? We will compare Alexandria Real Estate Equities to related companies based on the strength of its analyst recommendations, dividends, institutional ownership, valuation, risk, profitability and earnings.

Risk and Volatility

Alexandria Real Estate Equities has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities’ competitors have a beta of 0.80, indicating that their average stock price is 20% less volatile than the S&P 500.

Dividends

Alexandria Real Estate Equities pays an annual dividend of $3.44 per share and has a dividend yield of 2.7%. Alexandria Real Estate Equities pays out 390.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 3.9% and pay out 190.7% of their earnings in the form of a dividend. Alexandria Real Estate Equities has increased its dividend for 6 consecutive years. Alexandria Real Estate Equities lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Alexandria Real Estate Equities and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alexandria Real Estate Equities 13.21% 3.69% 1.83%
Alexandria Real Estate Equities Competitors 53.90% 6.83% 3.94%

Earnings & Valuation

This table compares Alexandria Real Estate Equities and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Alexandria Real Estate Equities $921.71 million -$65.90 million 143.47
Alexandria Real Estate Equities Competitors $536.81 million $100.12 million 485.40

Alexandria Real Estate Equities has higher revenue, but lower earnings than its competitors. Alexandria Real Estate Equities is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

71.6% of shares of all “Commercial REITs” companies are held by institutional investors. 1.5% of Alexandria Real Estate Equities shares are held by company insiders. Comparatively, 7.5% of shares of all “Commercial REITs” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Alexandria Real Estate Equities and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alexandria Real Estate Equities 0 3 3 0 2.50
Alexandria Real Estate Equities Competitors 657 2597 2231 23 2.29

Alexandria Real Estate Equities currently has a consensus target price of $108.80, suggesting a potential downside of 13.82%. As a group, “Commercial REITs” companies have a potential upside of 7.09%. Given Alexandria Real Estate Equities’ competitors higher possible upside, analysts clearly believe Alexandria Real Estate Equities has less favorable growth aspects than its competitors.

Summary

Alexandria Real Estate Equities competitors beat Alexandria Real Estate Equities on 11 of the 15 factors compared.

Alexandria Real Estate Equities Company Profile

Alexandria Real Estate Equities, Inc. is a real estate investment (REIT). The Company is engaged in the business of providing space for lease to the life science and technology industries. It focuses on collaborative life science and technology campuses. It develops urban cluster campuses and ecosystems. As of December 31, 2016, the Company had 199 properties in North America. As of December 31, 2016, its asset base in North America consisted of 25.2 million square feet, including 19.9 million rentable square feet/foot (RSF) of operating properties, and development and redevelopment of under construction or pre-construction, as well as 5.3 million square feet of future ground-up development projects. Its properties are located in various areas, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle Park. Its properties include Alexandria Technology Square, Alexandria Park at 128 and Alexandria Technology Center-Gateway.

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