Financial Comparison: Government Properties Income Trust (GOV) vs. CBRE Group (CBRE)

Government Properties Income Trust (NASDAQ: GOV) and CBRE Group (NYSE:CBRE) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Dividends

Government Properties Income Trust pays an annual dividend of $1.72 per share and has a dividend yield of 10.9%. CBRE Group does not pay a dividend. Government Properties Income Trust pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

57.9% of Government Properties Income Trust shares are owned by institutional investors. Comparatively, 93.0% of CBRE Group shares are owned by institutional investors. 1.3% of Government Properties Income Trust shares are owned by company insiders. Comparatively, 0.9% of CBRE Group 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.

Volatility and Risk

Government Properties Income Trust has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, CBRE Group has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500.

Profitability

This table compares Government Properties Income Trust and CBRE Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Government Properties Income Trust 3.16% 0.87% 0.32%
CBRE Group 4.48% 24.15% 8.43%

Valuation & Earnings

This table compares Government Properties Income Trust and CBRE Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Government Properties Income Trust $316.53 million 4.96 $12.09 million $2.02 7.85
CBRE Group $14.21 billion 1.14 $691.47 million $2.71 17.62

CBRE Group has higher revenue and earnings than Government Properties Income Trust. Government Properties Income Trust is trading at a lower price-to-earnings ratio than CBRE Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Government Properties Income Trust and CBRE Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Government Properties Income Trust 3 1 2 0 1.83
CBRE Group 0 3 7 1 2.82

Government Properties Income Trust presently has a consensus price target of $17.17, suggesting a potential upside of 8.31%. CBRE Group has a consensus price target of $48.61, suggesting a potential upside of 1.82%. Given Government Properties Income Trust’s higher possible upside, equities research analysts clearly believe Government Properties Income Trust is more favorable than CBRE Group.

Summary

CBRE Group beats Government Properties Income Trust on 13 of the 17 factors compared between the two stocks.

About Government Properties Income Trust

GOV is a real estate investment trust, or REIT, which primarily owns properties located throughout the United States that are majority leased to government tenants and office properties in the metropolitan Washington, D.C. market area that are leased to government and private sector tenants. GOV is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, Massachusetts.

About CBRE Group

CBRE Group, Inc. operates as a commercial real estate services and investment company worldwide. It operates through Americas; Europe, Middle East and Africa; Asia Pacific; Global Investment Management; and Development Services segments. The company offers strategic advice and execution to owners, investors, and occupiers of real estate in connection with leasing; integrated property sales, and mortgage and structured financing services under the CBRE Capital Markets brand; and valuation services that include market value appraisals, litigation support, discounted cash flow analyses, and feasibility studies, as well as consulting services, such as property condition reports, hotel advisory, and environmental consulting. It also provides facilities management, project management, transaction management, and strategic consulting services to occupiers of real estate; and property management services comprising construction management, marketing, building engineering, accounting, and financial services for owners/investors in office, industrial, and retail properties. In addition, the company provides investment management services under the CBRE Global Investors brand to pension funds, insurance companies, sovereign wealth funds, foundations, endowments, and other institutional investors; and development services under the Trammell Crow Company brand name primarily to users of and investors in commercial real estate. CBRE Group, Inc. was founded in 1906 and is headquartered in Los Angeles, California.

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