WP Carey (NYSE:WPC) and PS Business Parks (NYSE:PSB) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
WP Carey pays an annual dividend of $4.14 per share and has a dividend yield of 4.7%. PS Business Parks pays an annual dividend of $4.20 per share and has a dividend yield of 2.4%. WP Carey pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks pays out 64.9% of its earnings in the form of a dividend. WP Carey has raised its dividend for 18 consecutive years and PS Business Parks has raised its dividend for 5 consecutive years. WP Carey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares WP Carey and PS Business Parks’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|WP Carey||$885.73 million||16.95||$411.57 million||$5.39||16.31|
|PS Business Parks||$413.52 million||11.56||$226.70 million||$6.47||26.92|
WP Carey has higher revenue and earnings than PS Business Parks. WP Carey is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
WP Carey has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.
This table compares WP Carey and PS Business Parks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|PS Business Parks||35.70%||14.84%||7.33%|
Institutional and Insider Ownership
54.0% of WP Carey shares are held by institutional investors. Comparatively, 70.7% of PS Business Parks shares are held by institutional investors. 1.1% of WP Carey shares are held by company insiders. Comparatively, 1.5% of PS Business Parks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for WP Carey and PS Business Parks, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|PS Business Parks||1||0||0||0||1.00|
WP Carey currently has a consensus target price of $77.00, suggesting a potential downside of 12.43%. PS Business Parks has a consensus target price of $133.00, suggesting a potential downside of 23.65%. Given WP Carey’s stronger consensus rating and higher possible upside, equities analysts clearly believe WP Carey is more favorable than PS Business Parks.
WP Carey beats PS Business Parks on 9 of the 16 factors compared between the two stocks.
WP Carey Company Profile
W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $17 billion and a diversified portfolio of operationally-critical commercial real estate that includes 1,163 net lease properties covering approximately 131 million square feet. For over four decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term leases with built-in rent escalators. Its portfolio is located primarily in the U.S. and Northern and Western Europe and is well-diversified by tenant, property type, geographic location and tenant industry.
PS Business Parks Company Profile
PS Business Parks, Inc., a member of the S&P SmallCap 600, is a REIT that acquires, develops, owns and operates commercial properties, primarily multi-tenant industrial, flex and office space. As of December 31, 2018, the Company wholly owned 28.2 million rentable square feet with approximately 5,050 commercial customers in six states and held a 95.0% interest in a 395-unit apartment complex.
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