Paramount Group (PGRE) & New Residential Investment (NRZ) Head to Head Comparison

Paramount Group (NYSE: PGRE) and New Residential Investment (NYSE:NRZ) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Earnings and Valuation

This table compares Paramount Group and New Residential Investment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Paramount Group $718.97 million 5.15 $86.38 million $0.89 17.30
New Residential Investment $1.52 billion 3.87 $957.53 million $2.83 6.18

New Residential Investment has higher revenue and earnings than Paramount Group. New Residential Investment is trading at a lower price-to-earnings ratio than Paramount Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Paramount Group has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, New Residential Investment has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Profitability

This table compares Paramount Group and New Residential Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paramount Group 12.07% 1.74% 0.99%
New Residential Investment 89.43% 18.15% 4.07%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Paramount Group and New Residential Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paramount Group 1 2 0 0 1.67
New Residential Investment 0 0 6 0 3.00

Paramount Group currently has a consensus target price of $14.83, indicating a potential downside of 3.68%. New Residential Investment has a consensus target price of $18.88, indicating a potential upside of 7.92%. Given New Residential Investment’s stronger consensus rating and higher possible upside, analysts plainly believe New Residential Investment is more favorable than Paramount Group.

Insider & Institutional Ownership

63.2% of Paramount Group shares are owned by institutional investors. Comparatively, 53.3% of New Residential Investment shares are owned by institutional investors. 7.9% of Paramount Group shares are owned by company insiders. Comparatively, 4.0% of New Residential Investment shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Paramount Group pays an annual dividend of $0.40 per share and has a dividend yield of 2.6%. New Residential Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.4%. Paramount Group pays out 44.9% of its earnings in the form of a dividend. New Residential Investment pays out 70.7% 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. New Residential Investment has increased its dividend for 4 consecutive years. New Residential Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

New Residential Investment beats Paramount Group on 12 of the 17 factors compared between the two stocks.

About Paramount Group

Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

About New Residential Investment

New Residential Investment Corp., a real estate investment trust, focuses on investing in and managing residential mortgage related assets in the United States. It operates through Servicing Related Assets, Residential Securities and Loans, and Other Investments segments. The company invests in excess mortgage servicing rights (MSRs) on residential mortgage loans; and in servicer advances, including the basic fee component of the related MSRs. It also invests in real estate securities, residential mortgage loans, investments in consumer loans, and corporate. In addition, the company has an interest in a portfolio of consumer loans, including unsecured and homeowner loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2011 and is based in New York, New York.

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