Financial Comparison: Paramount Group (PGRE) & Eastgroup Properties (EGP)

Paramount Group (NYSE:PGRE) and Eastgroup Properties (NYSE:EGP) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Risk and Volatility

Paramount Group has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Eastgroup Properties has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Institutional & Insider Ownership

63.4% of Paramount Group shares are held by institutional investors. Comparatively, 93.2% of Eastgroup Properties shares are held by institutional investors. 7.9% of Paramount Group shares are held by company insiders. Comparatively, 2.9% of Eastgroup Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Paramount Group and Eastgroup Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paramount Group 1 2 1 0 2.00
Eastgroup Properties 0 5 3 0 2.38

Paramount Group presently has a consensus price target of $16.38, indicating a potential upside of 13.09%. Eastgroup Properties has a consensus price target of $96.13, indicating a potential downside of 2.78%. Given Paramount Group’s higher possible upside, research analysts plainly believe Paramount Group is more favorable than Eastgroup Properties.

Profitability

This table compares Paramount Group and Eastgroup Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paramount Group -0.40% -0.06% -0.03%
Eastgroup Properties 29.80% 10.69% 4.31%

Earnings and Valuation

This table compares Paramount Group and Eastgroup Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Paramount Group $718.97 million 4.78 $86.38 million $0.89 16.27
Eastgroup Properties $274.15 million 13.00 $83.18 million $4.26 23.21

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

Dividends

Paramount Group pays an annual dividend of $0.40 per share and has a dividend yield of 2.8%. Eastgroup Properties pays an annual dividend of $2.88 per share and has a dividend yield of 2.9%. Paramount Group pays out 44.9% of its earnings in the form of a dividend. Eastgroup Properties pays out 67.6% 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. Eastgroup Properties has increased its dividend for 6 consecutive years. Eastgroup Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Eastgroup Properties beats Paramount Group on 11 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 Eastgroup Properties

EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 50,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio, including development projects in lease-up and under construction, currently includes approximately 40.6 million square feet.

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