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 companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.
Institutional & Insider Ownership
63.2% of Paramount Group shares are held by institutional investors. Comparatively, 53.3% of New Residential Investment shares are held by institutional investors. 7.9% of Paramount Group shares are held by company insiders. Comparatively, 0.9% of New Residential Investment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Paramount Group has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, New Residential Investment has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.
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|
|New Residential Investment||89.43%||18.15%||4.07%|
Valuation and Earnings
This table compares Paramount Group and New Residential Investment’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Paramount Group||$718.97 million||5.13||$86.38 million||$0.89||17.24|
|New Residential Investment||$1.52 billion||3.96||$957.53 million||$2.83||6.33|
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.
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|
|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 3.30%. New Residential Investment has a consensus target price of $18.88, indicating a potential upside of 5.45%. Given New Residential Investment’s stronger consensus rating and higher possible upside, analysts plainly believe New Residential Investment is more favorable than Paramount Group.
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 11.2%. 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.
New Residential Investment beats Paramount Group on 12 of the 17 factors compared between the two stocks.
Paramount Group Company Profile
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.
New Residential Investment Company Profile
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.
Receive News & Ratings for Paramount Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Paramount Group and related companies with MarketBeat.com's FREE daily email newsletter.