WP Carey (NYSE:WPC) and PS Business Parks (NYSE:PSB) Critical Analysis

Share on StockTwits

WP Carey (NYSE:WPC) and PS Business Parks (NYSE:PSB) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Dividends

WP Carey pays an annual dividend of $4.14 per share and has a dividend yield of 4.7%. PS Business Parks pays an annual dividend of $4.20 per share and has a dividend yield of 2.4%. WP Carey pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks pays out 64.9% of its earnings in the form of a dividend. WP Carey has increased its dividend for 18 consecutive years and PS Business Parks has increased its dividend for 5 consecutive years. WP Carey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares WP Carey and PS Business Parks’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WP Carey $885.73 million 16.95 $411.57 million $5.39 16.31
PS Business Parks $413.52 million 11.56 $226.70 million $6.47 26.92

WP Carey has higher revenue and earnings than PS Business Parks. WP Carey is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

WP Carey has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, PS Business Parks has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Profitability

This table compares WP Carey and PS Business Parks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WP Carey 38.36% 6.72% 3.17%
PS Business Parks 35.70% 14.84% 7.33%

Institutional & Insider Ownership

54.0% of WP Carey shares are held by institutional investors. Comparatively, 70.7% of PS Business Parks shares are held by institutional investors. 1.1% of WP Carey shares are held by insiders. Comparatively, 1.5% of PS Business Parks 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for WP Carey and PS Business Parks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WP Carey 1 4 0 0 1.80
PS Business Parks 1 0 0 0 1.00

WP Carey currently has a consensus price target of $77.00, suggesting a potential downside of 12.43%. PS Business Parks has a consensus price target of $133.00, suggesting a potential downside of 23.65%. Given WP Carey’s stronger consensus rating and higher possible upside, research analysts plainly believe WP Carey is more favorable than PS Business Parks.

Summary

WP Carey beats PS Business Parks on 9 of the 16 factors compared between the two stocks.

WP Carey Company Profile

W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $17 billion and a diversified portfolio of operationally-critical commercial real estate that includes 1,163 net lease properties covering approximately 131 million square feet. For over four decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term leases with built-in rent escalators. Its portfolio is located primarily in the U.S. and Northern and Western Europe and is well-diversified by tenant, property type, geographic location and tenant industry.

PS Business Parks Company Profile

PS Business Parks, Inc., a member of the S&P SmallCap 600, is a REIT that acquires, develops, owns and operates commercial properties, primarily multi-tenant industrial, flex and office space. As of December 31, 2018, the Company wholly owned 28.2 million rentable square feet with approximately 5,050 commercial customers in six states and held a 95.0% interest in a 395-unit apartment complex.

Receive News & Ratings for WP Carey Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for WP Carey and related companies with MarketBeat.com's FREE daily email newsletter.