Critical Review: Franklin Street Properties (NYSE:FSP) & Cousins Properties (NYSE:CUZ)

Franklin Street Properties (NYSE:FSP) and Cousins Properties (NYSE:CUZ) are both real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

61.4% of Franklin Street Properties shares are held by institutional investors. Comparatively, 94.4% of Cousins Properties shares are held by institutional investors. 4.9% of Franklin Street Properties shares are held by company insiders. Comparatively, 1.8% of Cousins Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Franklin Street Properties and Cousins Properties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Street Properties	0	0	0	0	0.00
Cousins Properties	0	3	6	0	2.67

Cousins Properties has a consensus price target of $30.91, suggesting a potential upside of 5.64%. Given Cousins Properties’ stronger consensus rating and higher probable upside, analysts clearly believe Cousins Properties is more favorable than Franklin Street Properties.

Earnings & Valuation

This table compares Franklin Street Properties and Cousins Properties”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Street Properties	$105.92 million	0.43	-$52.72 million	($0.40)	-1.09
Cousins Properties	$993.82 million	4.85	$40.50 million	$0.04	731.48

Cousins Properties has higher revenue and earnings than Franklin Street Properties. Franklin Street Properties is trading at a lower price-to-earnings ratio than Cousins Properties, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Franklin Street Properties has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Cousins Properties has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Profitability

This table compares Franklin Street Properties and Cousins Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Street Properties	-43.90%	-7.79%	-5.30%
Cousins Properties	0.62%	0.14%	0.07%

Dividends

Franklin Street Properties pays an annual dividend of $0.04 per share and has a dividend yield of 9.1%. Cousins Properties pays an annual dividend of $1.28 per share and has a dividend yield of 4.4%. Franklin Street Properties pays out -10.0% of its earnings in the form of a dividend. Cousins Properties pays out 3,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin Street Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cousins Properties beats Franklin Street Properties on 13 of the 16 factors compared between the two stocks.

About Franklin Street Properties

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.

About Cousins Properties

Cousins Properties Incorporated ("Cousins") is a fully integrated, self-administered, and self-managed real estate investment trust (REIT). The Company, based in Atlanta and acting through its operating partnership, Cousins Properties LP, primarily invests in Class A office buildings located in high-growth Sun Belt markets. Founded in 1958, Cousins creates shareholder value through its extensive expertise in the development, acquisition, leasing, and management of high-quality real estate assets. The Company has a comprehensive strategy in place based on a simple platform, trophy assets, and opportunistic investments.