Analyzing CyrusOne (CONE) & InfraREIT (HIFR)

InfraREIT (NYSE: HIFR) and CyrusOne (NASDAQ:CONE) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Risk & Volatility

InfraREIT has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, CyrusOne has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for InfraREIT and CyrusOne, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InfraREIT 0 2 2 0 2.50
CyrusOne 1 2 11 0 2.71

InfraREIT presently has a consensus price target of $23.00, suggesting a potential upside of 2.22%. CyrusOne has a consensus price target of $60.67, suggesting a potential upside of 2.79%. Given CyrusOne’s stronger consensus rating and higher possible upside, analysts plainly believe CyrusOne is more favorable than InfraREIT.

Dividends

InfraREIT pays an annual dividend of $1.00 per share and has a dividend yield of 4.4%. CyrusOne pays an annual dividend of $1.68 per share and has a dividend yield of 2.8%. InfraREIT pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CyrusOne pays out -541.9% of its earnings in the form of a dividend.

Insider and Institutional Ownership

84.1% of InfraREIT shares are owned by institutional investors. Comparatively, 97.5% of CyrusOne shares are owned by institutional investors. 28.0% of InfraREIT shares are owned by company insiders. Comparatively, 1.6% of CyrusOne shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares InfraREIT and CyrusOne’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
InfraREIT $184.70 million 5.33 $160.52 million $1.20 18.75
CyrusOne $597.40 million 8.70 $296.60 million ($0.31) -190.38

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

Profitability

This table compares InfraREIT and CyrusOne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InfraREIT 28.31% 6.28% 3.13%
CyrusOne -4.35% 1.30% 0.52%

Summary

CyrusOne beats InfraREIT on 9 of the 15 factors compared between the two stocks.

About InfraREIT

InfraREIT, Inc. is a real estate investment trust. The Company is engaged in owning and leasing rate-regulated transmission and distribution (T&D) assets in Texas. It leases its T&D assets to Sharyland Utilities, L.P. Its assets are located in the Texas Panhandle near Amarillo, the Permian Basin in and around Stanton, Central Texas around Brady, Northeast Texas in and around Celeste and South Texas near McAllen. As of December 31, 2016, its T&D assets consisted of approximately 54,000 electricity delivery points, approximately 815 circuit miles of transmission lines, approximately 40,500 circuit miles of distribution lines, 57 substations and a 300 megawatt high-voltage direct current (DC) Tie between Texas and Mexico (Railroad DC Tie). As of December 31, 2016, its T&D assets in each of its leases included S/B/C Lease, McAllen Lease, competitive renewable energy zone (CREZ) Lease, Stanton Transmission Loop Lease and Electric Reliability Council of Texas (ERCOT) Transmission Lease.

About CyrusOne

CyrusOne Inc. is a real estate investment trust. The Company is an owner, operator and developer of enterprise-class, carrier-neutral, multi-tenant data center properties. The Company’s data centers are generally purpose-built facilities with redundant power and cooling. The CyrusOne National IX Platform (the National IX Platform) delivers interconnection across states and between metro-enabled sites within its footprint and beyond. The Company has data centers in the United States, London and Singapore. As of December 31, 2016, the Company provided mission-critical data center facilities for 932 customers in 35 data centers and two recovery centers in 11 distinct markets (nine cities in the United States, London and Singapore) with approximately 3,904,000 net rentable square feet (NRSF). The Company provides round the clock security guard monitoring with customizable security features. As of December 31, 2016, the Company had approximately 1,657,000 NRSF under development.

Receive News & Ratings for InfraREIT Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for InfraREIT Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply