Contrasting MGM Growth Properties (MGP) & Education Realty Trust (EDR)

MGM Growth Properties (NYSE:MGP) and Education Realty Trust (NYSE:EDR) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Risk & Volatility

MGM Growth Properties has a beta of -0.42, suggesting that its stock price is 142% less volatile than the S&P 500. Comparatively, Education Realty Trust has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Profitability

This table compares MGM Growth Properties and Education Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MGM Growth Properties 5.85% 0.81% 0.47%
Education Realty Trust 38.30% 6.70% 4.16%

Analyst Ratings

This is a summary of recent ratings and recommmendations for MGM Growth Properties and Education Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGM Growth Properties 0 4 6 0 2.60
Education Realty Trust 1 3 5 0 2.44

MGM Growth Properties currently has a consensus price target of $32.67, suggesting a potential upside of 15.51%. Education Realty Trust has a consensus price target of $41.93, suggesting a potential upside of 1,321.31%. Given Education Realty Trust’s higher probable upside, analysts clearly believe Education Realty Trust is more favorable than MGM Growth Properties.

Valuation and Earnings

This table compares MGM Growth Properties and Education Realty Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MGM Growth Properties $765.70 million 2.62 $41.77 million $2.01 14.07
Education Realty Trust $331.07 million 0.72 $47.44 million $1.90 1.55

Education Realty Trust has lower revenue, but higher earnings than MGM Growth Properties. Education Realty Trust is trading at a lower price-to-earnings ratio than MGM Growth Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

MGM Growth Properties pays an annual dividend of $1.75 per share and has a dividend yield of 6.2%. Education Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 52.9%. MGM Growth Properties pays out 87.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Education Realty Trust pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Education Realty Trust has raised its dividend for 7 consecutive years. Education Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Education Realty Trust beats MGM Growth Properties on 9 of the 15 factors compared between the two stocks.

MGM Growth Properties Company Profile

MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. As of June 30, 2018, MGP owns a portfolio of properties acquired from MGM Resorts, consisting of 11 premier destination resorts in Las Vegas and elsewhere across the United States, and the Park, a dining and entertainment complex which opened in April 2016. As of December 31, 2017, these properties collectively comprise over 27,500 hotel rooms, 2.7 million convention square footage, 100 retail outlets, 200 food and beverage outlets and 20 entertainment venues. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries that may be developed in the future.

Education Realty Trust Company Profile

A leader in the collegiate housing industry since 1964, EdR is one of the largest developers, owners and managers of high-quality collegiate housing communities. EdR is a self-administered and self-managed real estate investment trust (REIT) publicly traded on the New York Stock Exchange (NYSE: EDR). As a REIT, we create and own properties that will bring value to our portfolio and stockholders for a long time. Our projects are built to last and to be profitable for many years to come.

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