istar (STAR) vs. Colony NorthStar (CLNS) Critical Survey

istar (NYSE: STAR) and Colony NorthStar (NYSE:CLNS) are both financials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Analyst Ratings

This is a breakdown of current ratings and price targets for istar and Colony NorthStar, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
istar 0 2 0 0 2.00
Colony NorthStar 0 0 5 0 3.00

istar presently has a consensus target price of $14.00, indicating a potential upside of 35.79%. Colony NorthStar has a consensus target price of $15.35, indicating a potential upside of 86.06%. Given Colony NorthStar’s stronger consensus rating and higher possible upside, analysts clearly believe Colony NorthStar is more favorable than istar.

Dividends

Colony NorthStar pays an annual dividend of $1.08 per share and has a dividend yield of 13.1%. istar does not pay a dividend. Colony NorthStar pays out -2,700.0% of its earnings in the form of a dividend.

Risk and Volatility

istar has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Colony NorthStar has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Valuation & Earnings

This table compares istar and Colony NorthStar’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
istar $477.03 million 1.47 $95.30 million ($0.53) -19.45
Colony NorthStar $398.54 million 11.31 $42.28 million ($0.04) -206.25

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

Profitability

This table compares istar and Colony NorthStar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
istar 24.13% 19.57% 3.97%
Colony NorthStar 5.83% 1.88% 0.85%

Institutional and Insider Ownership

93.7% of istar shares are held by institutional investors. Comparatively, 81.5% of Colony NorthStar shares are held by institutional investors. 4.4% of istar shares are held by insiders. Comparatively, 8.0% of Colony NorthStar shares are held by 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.

Summary

Colony NorthStar beats istar on 9 of the 16 factors compared between the two stocks.

istar Company Profile

iStar Inc. finances, invests in and develops real estate and real estate related projects as part of its integrated investment platform. The Company’s four business segments are Real Estate Finance, Net Lease, Operating Properties, and Land and Development. The Real Estate Finance portfolio consists of senior and mezzanine real estate loans that may be either fixed-rate or variable-rate. The Net Lease portfolio consists of properties owned by the Company and leased to single tenants, where the properties are subject to long-term leases. The Operating Properties portfolio consists of commercial and residential properties, which represent a pool of assets across a range of geographies and property types. The Land and Development portfolio consists of land entitled for master planned communities, as well as waterfront and urban infill land parcels located throughout the United States. Its Land and Development projects include Great Oaks, Sage Scottsdale, Naples Reserve and Coney Island.

Colony NorthStar Company Profile

Colony NorthStar, Inc. is a diversified equity real estate investment trust (REIT). The Company combines a portfolio of real assets across the world, which are managed with a global real estate investment manager. The Company has property holdings in the healthcare, industrial and hospitality sectors, opportunistic equity and debt investments, and an embedded institutional and retail investment management business. In addition, the Company owns NorthStar Securities, LLC, a captive broker-dealer platform which raises capital in the retail market. The Company acquires, develops and operates industrial properties in metropolitan markets throughout the United States with a focus on light industrial buildings. The Company provides investment management services and offers investment products while serving as a fiduciary to a set of institutional and individual investors.

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