Terreno Realty (NYSE:TRNO) and Brandywine Realty Trust (NYSE:BDN) Critical Review

Brandywine Realty Trust (NYSE:BDN) and Terreno Realty (NYSE:TRNO) 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.

Profitability

This table compares Brandywine Realty Trust and Terreno Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brandywine Realty Trust	-38.03%	-19.55%	-5.42%
Terreno Realty	72.41%	8.27%	6.41%

Earnings and Valuation

This table compares Brandywine Realty Trust and Terreno Realty”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brandywine Realty Trust	$505.52 million	1.10	-$195.91 million	($1.07)	-2.98
Terreno Realty	$382.62 million	16.86	$184.50 million	$3.15	19.81

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

Insider & Institutional Ownership

87.3% of Brandywine Realty Trust shares are held by institutional investors. 3.3% of Brandywine Realty Trust shares are held by company insiders. Comparatively, 2.4% of Terreno Realty shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Brandywine Realty Trust and Terreno Realty, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brandywine Realty Trust	2	3	0	0	1.60
Terreno Realty	1	6	6	0	2.38

Brandywine Realty Trust currently has a consensus price target of $4.00, suggesting a potential upside of 25.39%. Terreno Realty has a consensus price target of $65.54, suggesting a potential upside of 5.04%. Given Brandywine Realty Trust’s higher probable upside, analysts clearly believe Brandywine Realty Trust is more favorable than Terreno Realty.

Dividends

Brandywine Realty Trust pays an annual dividend of $0.32 per share and has a dividend yield of 10.0%. Terreno Realty pays an annual dividend of $2.08 per share and has a dividend yield of 3.3%. Brandywine Realty Trust pays out -29.9% of its earnings in the form of a dividend. Terreno Realty pays out 66.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Terreno Realty has raised its dividend for 5 consecutive years. Brandywine Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Brandywine Realty Trust has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Terreno Realty has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Summary

Terreno Realty beats Brandywine Realty Trust on 10 of the 17 factors compared between the two stocks.

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia and Austin markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 160 properties and 22.6 million square feet as of September 30, 2023 which excludes assets held for sale. Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together.

About Terreno Realty

Terreno Realty Corporation (Terreno, and together with its subsidiaries, the Company) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. All square feet, acres, occupancy and number of properties disclosed in these notes to the consolidated financial statements are unaudited. As of December 31, 2023, the Company owned 259 buildings aggregating approximately 16.0 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development. The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (REIT) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year ended December 31, 2010.