Contrasting Realty Income (NYSE:O) & Boston Properties (NYSE:BXP)

Boston Properties (NYSE:BXPGet Rating) and Realty Income (NYSE:OGet Rating) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Profitability

This table compares Boston Properties and Realty Income’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boston Properties 17.49% 6.26% 2.26%
Realty Income 17.25% 2.32% 1.31%

Volatility & Risk

Boston Properties has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Realty Income has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Boston Properties and Realty Income, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boston Properties 1 3 8 0 2.58
Realty Income 0 3 5 0 2.63

Boston Properties presently has a consensus price target of $131.36, suggesting a potential upside of 4.51%. Realty Income has a consensus price target of $77.80, suggesting a potential upside of 5.79%. Given Realty Income’s stronger consensus rating and higher possible upside, analysts plainly believe Realty Income is more favorable than Boston Properties.

Earnings and Valuation

This table compares Boston Properties and Realty Income’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boston Properties $2.89 billion 6.82 $505.20 million $3.17 39.65
Realty Income $2.08 billion 21.13 $359.46 million $0.94 78.23

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

Insider and Institutional Ownership

89.0% of Boston Properties shares are held by institutional investors. Comparatively, 82.8% of Realty Income shares are held by institutional investors. 1.1% of Boston Properties shares are held by company insiders. Comparatively, 0.2% of Realty Income shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Boston Properties pays an annual dividend of $3.92 per share and has a dividend yield of 3.1%. Realty Income pays an annual dividend of $2.96 per share and has a dividend yield of 4.0%. Boston Properties pays out 123.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income pays out 314.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income has raised its dividend for 28 consecutive years. Realty Income is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Boston Properties beats Realty Income on 11 of the 17 factors compared between the two stocks.

About Boston Properties (Get Rating)

Boston Properties (NYSE:BXP) is the largest publicly-held developer and owner of Class A office properties in the United States, concentrated in five markets – Boston, Los Angeles, New York, San Francisco and Washington, DC. The Company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space. The Company's portfolio totals 51.2 million square feet and 196 properties, including six properties under construction/redevelopment.

About Realty Income (Get Rating)

Realty Income, The Monthly Dividend Company, is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with our commercial clients. To date, the company has declared 608 consecutive common stock monthly dividends throughout its 52-year operating history and increased the dividend 109 times since Realty Income's public listing in 1994 (NYSE: O). The company is a member of the S&P 500 Dividend Aristocrats index. Additional information about the company can be obtained from the corporate website at www.realtyincome.com.

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