Critical Contrast: Terreno Realty (TRNO) & Granite Real Estate Investment Trust (GRP)

Terreno Realty (NYSE: TRNO) and Granite Real Estate Investment Trust (NYSE:GRP) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares Terreno Realty and Granite Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Terreno Realty 33.00% 4.83% 3.06%
Granite Real Estate Investment Trust N/A N/A N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Terreno Realty and Granite Real Estate Investment Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Terreno Realty 0 4 5 0 2.56
Granite Real Estate Investment Trust 0 2 0 0 2.00

Terreno Realty currently has a consensus target price of $37.50, indicating a potential upside of 1.90%. Granite Real Estate Investment Trust has a consensus target price of $0.00, indicating a potential downside of 100.00%. Given Terreno Realty’s stronger consensus rating and higher probable upside, research analysts plainly believe Terreno Realty is more favorable than Granite Real Estate Investment Trust.

Insider and Institutional Ownership

98.8% of Terreno Realty shares are owned by institutional investors. 3.0% of Terreno Realty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Terreno Realty has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Granite Real Estate Investment Trust has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500.

Earnings & Valuation

This table compares Terreno Realty and Granite Real Estate Investment Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Terreno Realty $108.42 million 18.52 $15.11 million $0.77 47.79
Granite Real Estate Investment Trust N/A N/A N/A $1.29 30.16

Terreno Realty has higher revenue and earnings than Granite Real Estate Investment Trust. Granite Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Terreno Realty, indicating that it is currently the more affordable of the two stocks.

Dividends

Terreno Realty pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. Granite Real Estate Investment Trust does not pay a dividend. Terreno Realty pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Real Estate Investment Trust has increased its dividend for 4 consecutive years.

Summary

Terreno Realty beats Granite Real Estate Investment Trust on 10 of the 14 factors compared between the two stocks.

About Terreno Realty

Terreno Realty Corporation acquires, owns and operates industrial real estate in coastal markets in the United States, such as Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, District of Columbia (D.C.)/Baltimore. The Company invests in a range of industrial real estate, including warehouse/distribution, flex (including light industrial and research and development) and trans-shipment. As of December 31, 2016, the Company owned 166 buildings aggregating approximately 12 million square feet and five land parcels consisting of 22.8 acres. As of December 31, 2016, its properties were leased to 376 customers. The Company focuses on functional buildings in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which it operates.

About Granite Real Estate Investment Trust

Granite Real Estate Investment Trust is a real estate investment trust (REIT). It is engaged principally in the acquisition, development, construction, leasing, management and ownership of an industrial global rental portfolio of properties in North America and Europe leased primarily to Magna International Inc. and its automotive operating units. It is a service REIT with an international portfolio consisting of over 100 properties. It provides a range of services that includes sourcing and real estate acquisition, site development, assisting with government approvals and re-zoning to specific uses, build-to-suit construction, property renovation, project management and long-term leasing. In November 2013, Granite Real Estate Investment Trust completed its acquisition of a 2.5 million square foot portfolio of seven properties located in Germany and the Netherlands from funds managed by AEW Europe.

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