Critical Analysis: CyrusOne (CONE) and Its Competitors

CyrusOne (NASDAQ: CONE) is one of 16 publicly-traded companies in the “Specialized REITs” industry, but how does it contrast to its peers? We will compare CyrusOne to similar businesses based on the strength of its profitability, institutional ownership, analyst recommendations, valuation, risk, dividends and earnings.

Valuation and Earnings

This table compares CyrusOne and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
CyrusOne N/A N/A -197.61
CyrusOne Competitors $1.00 billion $531.02 million 28.89

CyrusOne’s peers have higher revenue and earnings than CyrusOne. CyrusOne is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

CyrusOne pays an annual dividend of $1.68 per share and has a dividend yield of 2.7%. CyrusOne pays out -541.9% of its earnings in the form of a dividend. As a group, “Specialized REITs” companies pay a dividend yield of 4.3% and pay out 170.4% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for CyrusOne and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CyrusOne 1 2 11 0 2.71
CyrusOne Competitors 26 210 552 20 2.70

CyrusOne currently has a consensus target price of $60.67, indicating a potential downside of 0.97%. As a group, “Specialized REITs” companies have a potential upside of 13.48%. Given CyrusOne’s peers higher possible upside, analysts clearly believe CyrusOne has less favorable growth aspects than its peers.

Risk and Volatility

CyrusOne has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, CyrusOne’s peers have a beta of 0.85, meaning that their average stock price is 15% less volatile than the S&P 500.

Institutional and Insider Ownership

96.5% of CyrusOne shares are owned by institutional investors. Comparatively, 64.6% of shares of all “Specialized REITs” companies are owned by institutional investors. 1.6% of CyrusOne shares are owned by insiders. Comparatively, 6.4% of shares of all “Specialized REITs” companies are owned by 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.

Profitability

This table compares CyrusOne and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CyrusOne -4.35% 1.30% 0.52%
CyrusOne Competitors 36.41% 8.84% 3.25%

Summary

CyrusOne peers beat CyrusOne on 10 of the 14 factors compared.

About CyrusOne

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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