Analyzing Boston Properties (NYSE:BXP) and Starwood Property Trust (NYSE:STWD)

Boston Properties (NYSE:BXPGet Free Report) and Starwood Property Trust (NYSE:STWDGet Free Report) are both real estate companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Dividends

Boston Properties pays an annual dividend of $3.92 per share and has a dividend yield of 6.0%. Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 10.0%. Boston Properties pays out 324.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Property Trust pays out 148.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

94.6% of Boston Properties shares are owned by institutional investors. Comparatively, 49.6% of Starwood Property Trust shares are owned by institutional investors. 1.2% of Boston Properties shares are owned by insiders. Comparatively, 5.4% of Starwood Property Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Boston Properties and Starwood Property Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boston Properties $3.27 billion 3.12 $190.21 million $1.21 53.78
Starwood Property Trust $1.46 billion 4.09 $871.47 million $1.29 14.82

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

Volatility & Risk

Boston Properties has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Starwood Property Trust has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Profitability

This table compares Boston Properties and Starwood Property Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boston Properties 5.81% 2.32% 0.76%
Starwood Property Trust 20.60% 8.82% 0.80%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Boston Properties and Starwood Property Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boston Properties 1 11 5 0 2.24
Starwood Property Trust 0 2 1 0 2.33

Boston Properties presently has a consensus price target of $69.56, suggesting a potential upside of 6.90%. Starwood Property Trust has a consensus price target of $21.50, suggesting a potential upside of 12.45%. Given Starwood Property Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Starwood Property Trust is more favorable than Boston Properties.

Summary

Starwood Property Trust beats Boston Properties on 12 of the 16 factors compared between the two stocks.

About Boston Properties

(Get Free Report)

Boston Properties, Inc. (NYSE: BXP) (BXP or the Company) is the largest publicly traded developer, owner, and manager of premier workplaces in the United States, concentrated in six dynamic gateway markets – Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. BXP has delivered places that power progress for our clients and communities for more than 50 years. BXP is a fully integrated real estate company, organized as a real estate investment trust (REIT). Including properties owned by joint ventures, BXP's portfolio totals 53.3 million square feet and 188 properties, including 10 properties under construction/redevelopment. BXP's properties include 167 office properties, 14 retail properties (including two retail properties under construction/redevelopment), six residential properties (including one residential property under construction) and one hotel. BXP is well-known for its inhouse building management expertise and responsiveness to clients' needs. BXP holds a superior track record of developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for a diverse array of creditworthy clients. BXP actively works to promote its growth and operations in a sustainable and responsible manner. BXP has earned a twelfth consecutive GRESB Green Star recognition and the highest GRESB 5-star Rating. BXP, an S&P 500 company, was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde and became a public company in 1997.

About Starwood Property Trust

(Get Free Report)

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through four segments: Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was incorporated in 2009 and is headquartered in Greenwich, Connecticut.

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