Financial Review: Brandywine Realty Trust (BDN) versus Equity Commonwealth (NYSE:EQC)

Brandywine Realty Trust (NYSE: BDN) and Equity Commonwealth (NYSE:EQC) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Brandywine Realty Trust and Equity Commonwealth, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brandywine Realty Trust 1 3 5 0 2.44
Equity Commonwealth 0 1 0 0 2.00

Brandywine Realty Trust currently has a consensus price target of $17.58, indicating a potential upside of 0.36%. Equity Commonwealth has a consensus price target of $31.00, indicating a potential upside of 2.11%. Given Equity Commonwealth’s higher possible upside, analysts plainly believe Equity Commonwealth is more favorable than Brandywine Realty Trust.

Dividends

Brandywine Realty Trust pays an annual dividend of $0.64 per share and has a dividend yield of 3.7%. Equity Commonwealth does not pay a dividend. Brandywine Realty Trust pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity Commonwealth has raised its dividend for 2 consecutive years.

Valuation & Earnings

This table compares Brandywine Realty Trust and Equity Commonwealth’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brandywine Realty Trust $525.46 million 5.85 $40.19 million $0.16 109.51
Equity Commonwealth $500.68 million 7.52 $232.89 million $0.44 69.00

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

Risk & Volatility

Brandywine Realty Trust has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Equity Commonwealth has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Brandywine Realty Trust 6.81% 2.12% 0.97%
Equity Commonwealth 17.04% 2.00% 1.43%

Institutional and Insider Ownership

98.8% of Brandywine Realty Trust shares are owned by institutional investors. Comparatively, 95.3% of Equity Commonwealth shares are owned by institutional investors. 1.8% of Brandywine Realty Trust shares are owned by company insiders. Comparatively, 1.0% of Equity Commonwealth shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Equity Commonwealth beats Brandywine Realty Trust on 9 of the 17 factors compared between the two stocks.

Brandywine Realty Trust Company Profile

Brandywine Realty Trust is a self-administered and self-managed real estate investment trust (REIT). The Company operates through five segments: Pennsylvania Suburbs, Philadelphia Central Business District (CBD), Metropolitan Washington, D.C., Austin, Texas, and Other. The Pennsylvania Suburbs segment includes properties in Chester, Delaware and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in the District of Columbia, Northern Virginia and Southern Maryland. The Austin, Texas segment includes properties in the City of Austin, Texas. The Other segment includes properties in Burlington and Camden counties in New Jersey, New Castle County in the state of Delaware and the City of Concord in California. As of December 31, 2016, the Company owned 113 properties that had approximately 17.6 million net rentable square feet.

Equity Commonwealth Company Profile

Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of August 14, 2017, the Company’s portfolio included 20 properties and 11 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.

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