Critical Contrast: Paramount Group (PGRE) & Its Competitors

Paramount Group (NASDAQ: PGRE) is one of 19 publicly-traded companies in the “Office REITs” industry, but how does it weigh in compared to its peers? We will compare Paramount Group to related businesses based on the strength of its valuation, profitability, dividends, institutional ownership, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

85.3% of shares of all “Office REITs” companies are owned by institutional investors. 2.9% of shares of all “Office REITs” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Paramount Group and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Paramount Group N/A N/A 44.14
Paramount Group Competitors $783.06 million $146.68 million 76.35

Paramount Group’s peers have higher revenue and earnings than Paramount Group. Paramount Group 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Paramount Group 77.76% 10.10% 6.37%
Paramount Group Competitors 8.95% 2.55% 1.08%

Analyst Ratings

This is a summary of current ratings and target prices for Paramount Group and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paramount Group 3 0 3 0 2.00
Paramount Group Competitors 121 521 531 3 2.35

Paramount Group currently has a consensus target price of $16.10, suggesting a potential downside of 1.41%. As a group, “Office REITs” companies have a potential upside of 9.38%. Given Paramount Group’s peers stronger consensus rating and higher probable upside, analysts clearly believe Paramount Group has less favorable growth aspects than its peers.

Summary

Paramount Group peers beat Paramount Group on 6 of the 10 factors compared.

Paramount Group Company Profile

Paramount Group, Inc. is a fully-integrated real estate investment trust (REIT) focused on owning, operating, managing, acquiring and redeveloping Class A office properties in select central business district submarkets of New York City, Washington, District of Columbia (D.C.) and San Francisco. The Company conducts its business through, and substantially all its interests in properties and investments are held by, Paramount Group Operating Partnership LP (the Operating Partnership). The Company’s segments include New York, Washington, D.C. and San Francisco. As of December 31, 2016, the Company’s portfolio consisted of 13 Class A office properties aggregating approximately 10.8 million square feet that was 93.3% leased and 90.9% occupied. The Company also has an investment management business, where it serves as the general partner and property manager of certain private equity real estate funds for institutional investors and high-net-worth individuals.

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