Prologis (NYSE:PLD) and Alexandria Real Estate Equities (NYSE:ARE) Critical Review

Prologis (NYSE:PLD) and Alexandria Real Estate Equities (NYSE:ARE) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Valuation and Earnings

This table compares Prologis and Alexandria Real Estate Equities”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prologis	$8.79 billion	15.08	$3.33 billion	$3.97	35.81
Alexandria Real Estate Equities	$3.03 billion	2.74	-$1.43 billion	($8.44)	-5.67

Prologis has higher revenue and earnings than Alexandria Real Estate Equities. Alexandria Real Estate Equities is trading at a lower price-to-earnings ratio than Prologis, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Prologis has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Insider and Institutional Ownership

93.5% of Prologis shares are held by institutional investors. Comparatively, 96.5% of Alexandria Real Estate Equities shares are held by institutional investors. 0.5% of Prologis shares are held by insiders. Comparatively, 1.4% of Alexandria Real Estate Equities shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Prologis and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prologis	41.54%	6.46%	3.78%
Alexandria Real Estate Equities	-47.23%	-6.82%	-3.90%

Analyst Ratings

This is a summary of recent recommendations and price targets for Prologis and Alexandria Real Estate Equities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prologis	0	7	13	0	2.65
Alexandria Real Estate Equities	2	12	3	0	2.06

Prologis presently has a consensus price target of $145.55, indicating a potential upside of 2.38%. Alexandria Real Estate Equities has a consensus price target of $63.67, indicating a potential upside of 33.06%. Given Alexandria Real Estate Equities’ higher possible upside, analysts clearly believe Alexandria Real Estate Equities is more favorable than Prologis.

Dividends

Prologis pays an annual dividend of $4.28 per share and has a dividend yield of 3.0%. Alexandria Real Estate Equities pays an annual dividend of $2.88 per share and has a dividend yield of 6.0%. Prologis pays out 107.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities pays out -34.1% of its earnings in the form of a dividend. Prologis has increased its dividend for 12 consecutive years and Alexandria Real Estate Equities has increased its dividend for 15 consecutive years. Alexandria Real Estate Equities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Prologis beats Alexandria Real Estate Equities on 11 of the 17 factors compared between the two stocks.

About Prologis

Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. At March 31, 2024, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.2 billion square feet (115 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 6,700 customers principally across two major categories: business-to-business and retail/online fulfillment.

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.